ACFND Acorn Energy Inc (QB)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2023

 

or

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

 

Commission file number: 001-33886

 

ACORN ENERGY, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		22-2786081
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

1000 N West Street, Suite 1200, Wilmington, Delaware		19801
(Address of principal executive offices)		(Zip Code)

 

410-654-3315

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class		Outstanding at November 7, 2023
Common Stock, $0.01 par value per share		2,484,791

 

 

 

ACORN ENERGY, INC.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended September 30, 2023

 

TABLE OF CONTENTS

 

	PAGE
PART I Financial Information
Item 1. Unaudited Condensed Consolidated Financial Statements:	3
Condensed Consolidated Balance Sheets as of September 30, 2023 (Unaudited) and December 31, 2022	3
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022	4
Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three and nine months ended September 30, 2023 and 2022	5
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosures About Market Risk	25
Item 4. Controls and Procedures	25
PART II Other Information
Item 6. Exhibits	26
Signatures	27

 

Certain statements contained in this report are forward-looking in nature. These statements are generally identified by the inclusion of phrases such as “we expect”, “we anticipate”, “we believe”, “we estimate” and other phrases of similar meaning. Whether such statements ultimately prove to be accurate depends upon a variety of factors that may affect our business and operations. Many of these factors are described in our most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission.

 

 

PART I

 

ITEM 1.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

 

		As of September 30, 2023				As of December 31, 2022
		(Unaudited)				(Audited)
ASSETS
Current assets:
Cash		$	1,749			$	1,450
Accounts receivable, net			583				597
Inventory, net			909				789
Deferred cost of goods sold (COGS)			890				887
Other current assets			343				288
Total current assets			4,474				4,011
Property and equipment, net			610				653
Operating right-of-use assets, net			220				298
Deferred COGS			642				807
Other assets			209				215
Total assets		$	6,155			$	5,984
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable		$	444			$	243
Accrued expenses			127				171
Deferred revenue			4,270				3,984
Operating lease liabilities			121				116
Other current liabilities			25				58
Total current liabilities			4,987				4,572
Long-term liabilities:
Deferred revenue			1,941				2,187
Operating lease liabilities			129				220
Other long-term liabilities			19				16
Total long-term liabilities			2,089				2,423
Commitments and contingencies (Note 7)			-				-
Stockholders’ deficit:
Acorn Energy, Inc. stockholders
Common stock - $0.01 par value per share: Authorized – 42,000,000 shares; issued and outstanding – 2,484,791 and 2,482,604 shares at September 30, 2023 and December 31, 2022, respectively*			25				25
Additional paid-in capital*			103,312				103,261
Accumulated stockholders’ deficit			(101,232	)			(101,267	)
Treasury stock, at cost – 50,178 and 50,178 shares at September 30, 2023 and December 31, 2022*			(3,036	)			(3,036	)
Total Acorn Energy, Inc. stockholders’ deficit			(931	)			(1,017	)
Non-controlling interest			10				6
Total stockholders’ deficit			(921	)			(1,011	)
Total liabilities and stockholders’ deficit		$	6,155			$	5,984

 

*	Includes effects of a 1-for-16 reverse stock split.

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA)

 

		2023				2022				2023				2022
		Nine months ended September 30,								Three months ended September 30,
		2023				2022				2023				2022
Revenue		$	5,809			$	5,155			$	2,087			$	1,783
COGS			1,453				1,436				537				568
Gross profit			4,356				3,719				1,550				1,215
Operating expenses:
Research and development (R&D) expense			614				637				212				227
Selling, general and administrative (SG&A) expense			3,746				3,585				1,330				1,198
Impairment of software			—				51				—				—
Total operating expenses			4,360				4,273				1,542				1,425
Operating (loss) income			(4	)			(554	)			8				(210	)
Interest income (expense), net			46				(1	)			19				—
Income (loss) before income taxes			42				(555	)			27				(210	)
Income tax expense			—				—				—				—
Net income (loss)			42				(555	)			27				(210	)
Non-controlling interest share of net income			(7	)			(1	)			(3	)			—
Net income (loss) attributable to Acorn Energy, Inc. stockholders		$	35			$	(556	)		$	24			$	(210	)
Basic and diluted net income (loss) per share attributable to Acorn Energy, Inc. stockholders*:		$	0.01			$	(0.22	)		$	0.01			$	(0.08	)
Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – basic and diluted
Basic*			2,484				2,481				2,485				2,481
Diluted*			2,506				2,481				2,532				2,481

 

*	Includes effects of a 1-for-16 reverse stock split.

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED) (IN THOUSANDS)

 

		Number of Shares*				Common Stock*				Additional Paid-In Capital*				Accumulated Deficit				Number of Treasury Shares*				Treasury Stock*				Total Acorn Energy, Inc. Stockholders’ Deficit				Non- controlling interests				Total Deficit
		Three and Nine Months Ended September 30, 2023
		Number of Shares*				Common Stock*				Additional Paid-In Capital*				Accumulated Deficit				Number of Treasury Shares*				Treasury Stock*				Total Acorn Energy, Inc. Stockholders’ Deficit				Non- controlling interests				Total Deficit
Balances as of December 31, 2022			2,483			$	25			$	103,261			$	(101,267	)			50			$	(3,036	)		$	(1,017	)		$	6			$	(1,011	)
Net loss			—				—				—				(85	)			—				—				(85	)			1				(84	)
Proceeds from warrant exercise			2				-**				5				—				—				—				5				—				5
Accrued dividend on OmniMetrix preferred shares			—				—				—				—				—				—				—				(1	)			(1	)
Stock option compensation			—				—				17				—				—				—				17				—				17
Balances as of March 31, 2023			2,485			$	25			$	103,283			$	(101,352	)			50			$	(3,036	)		$	(1,080	)		$	6			$	(1,074	)
Net income			—				—				—				96				—				—				96				3				99
Accrued dividend on OmniMetrix preferred shares			—				—				—				—				—				—				—				(1	)			(1	)
Stock option compensation			—				—				13				—				—				—				13				—				13
Balances as of June 30, 2023			2,485			$	25			$	103,296			$	(101,256	)			50			$	(3,036	)		$	(971	)		$	8			$	(963	)
Net income			—				—				—				24				—				—				24				3				27
Accrued dividend on OmniMetrix preferred shares			—				—				—				—				—				—				—				(1	)			(1	)
Stock option compensation			—				—				16				—				—				—				16				—				16
Balances as of September 30, 2023			2,485			$	25			$	103,312			$	(101,232	)			50			$	(3,036	)		$	(931	)		$	10			$	(921	)

 

		Three and Nine Months Ended September 30, 2022
		Number of Shares*				Common Stock*				Additional Paid-In Capital*				Accumulated Deficit				Number of Treasury Shares*				Treasury Stock*				Total Acorn Energy, Inc. Stockholders’ Deficit				Non- controlling interests				Total Deficit
Balances as of December 31, 2021			2,480			$	25			$	103,176			$	(100,634	)			50			$	(3,036	)		$	(469	)		$	8			$	(461	)
Net loss			—				—				—				(123	)			—				—				(123	)			1				(122	)
Accrued dividend on OmniMetrix preferred shares			—				—				—				—				—				—				—				(1	)			(1	)
Stock option compensation			—				—				31				—				—				—				31				—				31
Balances as of March 31, 2022			2,480			$	25			$	103,207			$	(100,757	)			50			$	(3,036	)		$	(561	)		$	8			$	(553	)
Net loss			—				—				—				(223	)			—				—				(223	)			-**				(223	)
Accrued dividend on OmniMetrix preferred shares			—				—				—				—				—				—				—				(1	)			(1	)
Stock option compensation			—				—				22				—				—				—				22				—				22
Balances as of June 30, 2022			2,480			$	25			$	103,229			$	(100,980	)			50			$	(3,036	)		$	(762	)		$	7			$	(755	)
Balance			2,480			$	25			$	103,229			$	(100,980	)			50			$	(3,036	)		$	(762	)		$	7			$	(755	)
Net loss			—				—				—				(210	)			—				—				(210	)			—				(210	)
Net income (loss)			—				—				—				(210	)			—				—				(210	)			—				(210	)
Accrued dividend on OmniMetrix preferred shares			—				—				—				—				—				—				—				(1	)			(1	)
Proceeds from stock option exercise			2				-**				5				—				—				—				5				—				5
Stock option compensation			—				—				16				—				—				—				16				—				16
Balances as of September 30, 2022			2,482			$	25			$	103,250			$	(101,190	)			50			$	(3,036	)		$	(951	)		$	6			$	(945	)
Balance			2,482			$	25			$	103,250			$	(101,190	)			50			$	(3,036	)		$	(951	)		$	6			$	(945	)

 

*	Includes effects of a 1-for-16 reverse stock split.

 

**	Less than $1.

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED) (IN THOUSANDS)

 

		2023				2022
		Nine months ended September 30,
		2023				2022
Cash flows provided by (used in) operating activities:
Net income (loss)		$	42			$	(555	)
Depreciation and amortization			115				83
Impairment of inventory			9				31
Impairment of software			—				51
Non-cash lease expense			96				93
Stock-based compensation			46				69
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable			14				(41	)
Increase in inventory			(129	)			(317	)
Decrease (increase) in deferred COGS			162				(158	)
Increase in other current assets and other assets			(49	)			(62	)
Increase (decrease) in accounts payable and accrued expenses			157				(91	)
Increase in deferred revenue			40				660
Decrease in operating lease liability			(104	)			(97	)
(Decrease) increase in other current liabilities and non-current liabilities			(33	)			23
Net cash provided by (used in) operating activities			366				(311	)
Cash flows used in investing activities:
Investments in technology			(70	)			(286	)
Other capital investments			(2	)			(6	)
Net cash used in investing activities			(72	)			(292	)
Cash flows provided by financing activities:
Stock option exercise proceeds			—				5
Warrant exercise proceeds			5				—
Net cash provided by financing activities			5				5
Net increase (decrease) in cash			299				(598	)
Cash at the beginning of the year			1,450				1,722
Cash at the end of the period		$	1,749			$	1,124
Supplemental cash flow information:
Cash paid during the period for:
Interest		$	2			$	1
Non-cash investing and financing activities:
Accrued preferred dividends to former CEO of OmniMetrix		$	3			$	3

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

ACORN ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

(UNAUDITED)

 

NOTE 1— BASIS OF PRESENTATION

 

The accompanying unaudited condensed consolidated financial statements of Acorn Energy, Inc. (“Acorn”) and its subsidiaries, OmniMetrix, LLC (“OmniMetrix”) and OMX Holdings, Inc. (collectively, with Acorn and OmniMetrix, “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine- and three-month periods ended September 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. All dollar amounts are rounded to the nearest thousand and, thus, are approximate.

 

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 16, 2023.

 

Reverse Stock Split

 

On September 5, 2023, the Board of Directors of Acorn approved a Certificate of Amendment to Acorn’s Restated Certificate of Incorporation (the “Certificate of Amendment”) that provided for a 1-for-16 reverse stock split of Acorn’s Common Stock (the “Reverse Stock Split”). Acorn filed the Certificate of Amendment with the Secretary of State of the State of Delaware on September 6, 2023, and the Reverse Stock Split became effective at 5:00 p.m. EDT on September 7, 2023. At the effective time of the Reverse Stock Split, every sixteen issued and outstanding shares of Acorn’s Common Stock were automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. Stockholders who would have otherwise been entitled to fractional shares of Common Stock, as a result of the Reverse Stock Split, received a cash payment in lieu of receiving fractional shares. The value of the fractional shares repurchased was $347 and equated to fifty-eight shares. All share and per share amounts of common stock, options and warrants contained in this Quarterly Report on Form 10-Q and the accompanying unaudited condensed consolidated financial statements and related footnotes have been restated for all periods to give retroactive effect to the Reverse Stock Split and the related fractional share repurchase for all prior periods presented. Accordingly, the unaudited Condensed Consolidated Statement of Stockholders’ Deficit reflects the impact of the Reverse Stock Split by reclassifying from “Common Stock” to “Additional paid in capital” an amount equal to the aggregate par value of the number of shares by which the total number of shares outstanding decreased as a result of the Reverse Stock Split.

 

NOTE 2—ACCOUNTING POLICIES

 

Use of Estimates in Preparation of Financial Statements

 

The preparation of unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

As applicable to these unaudited condensed consolidated financial statements, the most significant estimates and assumptions relate to uncertainties with respect to revenue recognition and management’s projections related to the going concern analysis.

 

7

 

Concentrations of Credit Risk

 

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and trade accounts receivable. The Company’s cash was deposited with a U.S. bank and amounted to $1,749,000 at September 30, 2023. The Company does not believe there is a significant risk of non-performance by its counterparties. For the three-month period ended September 30, 2023, there were no customers that represented greater than 10% of the Company’s total invoiced sales. For the nine-month period ended September 30, 2023, there was one customer that represented 11% of the Company’s total invoiced sales. At September 30, 2023, the Company did not have any customers that represented greater than 10% of our total accounts receivable. Approximately 12% of the accounts receivable at December 31, 2022 was due from one customer which was subsequently collected in full. Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising the Company’s customer base. Although we do not believe there is significant risk of non-performance by these counterparties, any failures or defaults on their part could negatively impact the value of our financial instruments and could have a material adverse effect on our business, operations or financial condition.

 

Inventory

 

Inventories are comprised of components (raw materials), work-in-process and finished goods, which are measured at the lower of cost or net realizable value.

 

Raw materials inventory is generally comprised of radios, cables, antennas, and electrical components. Finished goods inventory consists of fully assembled systems ready for final shipment to the customer. Costs are determined at cost of acquisition on a weighted average basis and include all outside production and applicable shipping costs.

 

All inventories are periodically reviewed to identify slow-moving and obsolete inventory. Management conducted an assessment and wrote-off inventory carried at $9,000 for the nine months ended September 30, 2023, of which $1,000 was written off in the three months ended September 30, 2023.

 

Revenue Recognition

 

On September 1, 2023, OmniMetrix launched an updated version of its products that includes new functionality in its TrueGuard, AIRGuard, Patriot and Hero products that allows its customers to have options as it relates to obtaining and utilizing the data that is provided by its hardware devices. This new functionality allows for SIM card options, configuration options regarding IP address endpoints and DNS routes, and access to OmniMetrix’s over-the-air data protocol. This product update allows customers to have the option to purchase OmniMetrix’s monitoring service, monitor the products themselves if they have the ability in-house, or choose another monitoring provider if they so desire. OmniMetrix’s prior hardware product version could not function as a distinct product from its monitoring services. This new version’s functionality results in OmniMetrix’s hardware and monitoring services being capable of being two distinct products and services. OmniMetrix recognizes revenue, COGS and commissions from the sale of the new version of its hardware products sold when the product is shipped rather than over the estimated time that the unit is in service for the customer. Monitoring revenue continues to be deferred and amortized over the period that the monitoring services are rendered. The remaining balance of deferred revenue from the prior version of these products will continue to be amortized each period until it is fully amortized. The modification to the circuit boards and embedded firmware of hardware enclosures in inventory as of August 31, 2023 were made such that only the new version of these products was sold subsequent to this date.

 

Basic and Diluted Net Income (Loss) Per Share

 

Basic net income (loss) per share is computed by dividing the net income (loss) attributable to Acorn Energy, Inc. by the weighted average number of shares outstanding during the period, excluding treasury stock. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares outstanding plus the dilutive potential of common shares which would result from the exercise of stock options. The dilutive effects of stock options are excluded from the computation of diluted net income (loss) per share if doing so would be antidilutive. For the nine-month period ending September 30, 2023, the weighted average number of options that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 6,000 (which have a weighted average exercise price of $8.49). For the three-month period ending September 30, 2023, there were no options that were excluded from the computation of diluted net loss due to having an antidilutive effect. For both the nine- and three-month periods ending September 30, 2022, the number of options that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 60,000 (which have a weighted average exercise price of $6.72) and the number of warrants that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 2,187 (which had a weighted average exercise price of $2.08).

 

8

 

The following data represents the amounts used in computing EPS and the effect on net income (loss) and the weighted average number of shares of dilutive potential common stock (in thousands):

 SCHEDULE OF EFFECT ON NET INCOME LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES

		2023				2022				2023				2022
		Nine months ended September 30,								Three months ended September 30,
		2023				2022				2023				2022
Net income (loss) available to common stockholders		$	35			$	(556	)		$	24			$	(210	)
Weighted average share outstanding:
Basic			2,484				2,481				2,485				2,481
Add: Stock options			22				—				47				—
Diluted			2,506				2,481				2,532				2,481
Basic and diluted net income (loss) per share		$	0.01			$	(0.22	)		$	0.01			$	(0.08	)

 

Recently Adopted Accounting Standards

 

Other than the pronouncement noted below, there have been no recent accounting pronouncements or changes in accounting standards during the nine-month period ended September 30, 2023 that would affect the Company’s condensed consolidated financial statements.

 

On January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance was issued to provide financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Specifically, this guidance requires entities to utilize a new “expected loss” model as it relates to trade and other receivables. The adoption of the standard impacts the way the Company estimates the allowance for doubtful accounts on its trade and other receivables. Refer to Note 4, “Allowance for Credit Losses,” for further information regarding the Company’s allowance for expected credit losses.

 

NOTE 3—LIQUIDITY

 

As of September 30, 2023, the Company had cash of $1,749,000.

 

At September 30, 2023, the Company had negative working capital of $513,000. The Company’s working capital includes $1,749,000 of cash and deferred revenue of $4,270,000. Such deferred revenue does not require a significant cash outlay for the revenue to be recognized. Net cash increased during the nine months ended September 30, 2023 by $299,000, of which $366,000 was provided by operating activities, $72,000 was used in investing activities and $5,000 was provided by financing activities.

 

As of November 7, 2023, the Company had cash of $1,684,000. The Company believes that such cash, plus the cash generated from operations, will provide sufficient liquidity to finance the operating activities of the Company at its current level of operations for the twelve months from the issuance of these unaudited condensed consolidated financial statements. The Company may, at some point, elect to obtain a new line of credit or other source of financing to fund additional investments in the business.

 

9

 

NOTE 4—ALLOWANCE FOR CREDIT LOSSES

 

For the Company, ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” applies to its contract assets (deferred COGS and deferred sales commissions), lease receivables (sublease, see Note 6) and trade receivables. There are no expected or estimated credit losses on the Company’s contract assets or its lease receivable based on the Company’s implementation of ASU 2016-13.

 

The Company’s trade receivables primarily arise from the sale of our products to independent residential dealers, industrial distributors and dealers, national and regional retailers, equipment distributors, and certain end users with payment terms generally ranging from 30 to 60 days. The Company evaluates the credit risk of a customer when extending credit based on a combination of various financial and qualitative factors that may affect the customer’s ability to pay. These factors include the customer’s financial condition and past payment experience.

 

The Company maintains an allowance for credit losses, which represents an estimate of expected losses over the remaining contractual life of its receivables considering current market conditions and estimates for supportable forecasts when appropriate. The Company measures expected credit losses on its trade receivables on an entity-by-entity basis. The estimate of expected credit losses considers a historical loss experience rate that is adjusted for delinquency trends, collection experience, and/or economic risk where appropriate. Additionally, management develops a specific allowance for trade receivables known to have a high risk of expected future credit loss.

 

The Company has historically experienced immaterial write-offs given the nature of the customers that receive credit. As of September 30, 2023, the Company had gross receivables of $590,000 and an allowance for credit losses of $7,000.

 

The following is a tabular reconciliation of the Company’s allowance for credit losses:

 SCHEDULE OF ALLOWANCES FOR CREDIT LOSSES

		September 30, 2023				December 31, 2022
		As of
		September 30, 2023				December 31, 2022
		(in thousands)
Balance at beginning of period		$	10			$	6
Provision for credit losses			3				3
Net (charge-offs) credits			(6	)			1
Balance at end of period		$	7			$	10

 

NOTE 5—INVENTORY

 SCHEDULE OF INVENTORY

		September 30, 2023				December 31, 2022
		As of
		September 30, 2023				December 31, 2022
		(in thousands)
Raw materials		$	859			$	684
Finished goods			50				105
Inventory net		$	909			$	789

 

At September 30, 2023 and December 31, 2022, the Company’s inventory reserve was $9,000 and $4,000, respectively.

 

All inventories are periodically reviewed to identify slow-moving and obsolete inventory. Management conducted an assessment and wrote-off inventory carried at $9,000 for the nine months ended September 30, 2023, of which $1,000 was written off in the three months ended September 30, 2023.

 

10

 

NOTE 6—LEASES

 

OmniMetrix leases office space and office equipment under operating lease agreements. The office lease has an expiration date of September 30, 2025. The office equipment lease was entered into in April 2019 and has a sixty-month term. Operating lease payments for the nine months ended September 30, 2023 and 2022 were $96,000 and $93,000, respectively. Operating lease payments for the three months ended September 30, 2023 and 2022 were $33,000 and $31,000, respectively. The future minimum lease payments on non-cancellable operating leases as of September 30, 2023 using a discount rate of 4.5% are $250,000. The 4.5% discount rate used is the incremental borrowing rate which, as defined in ASC 842, is the rate of interest that a lessee would have to pay to borrow, on a collateralized basis, over a similar term and in a similar economic environment, an amount equal to the lease payments.

 

Supplemental cash flow information related to leases consisted of the following (in thousands):

 SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES

		For the Nine Months Ending September 30,
		2023				2022
Cash paid for operating lease liabilities		$	96			$	93

 

Supplemental balance sheet information related to leases consisted of the following:

 SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES

			2023
Weighted average remaining lease terms for operating leases			1.99 years

 

The table below reconciles the undiscounted future minimum lease payments under non-cancelable lease agreements having initial terms of more than one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of September 30, 2023 (in thousands):

 SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

		Year ended September 30,
2024		$	129
2025			132
Total undiscounted cash flows			261
Less: Imputed interest			(11	)
Present value of operating lease liabilities (a)		$	250

 

(a)

Includes current portion of $121,000 for operating leases.

 

On July 6, 2021, the Company entered into an agreement with King Industrial Realty, Inc., to sublease from the Company 1,900 square feet of office space of the Company’s 21,000 square feet of office and production space in the Hamilton Mill Business Park located in Buford, Georgia, for a monthly sublease payment of $2,375 (plus an annual escalator each year of 3%) which includes the base rent plus a pro-rata share of utilities, property taxes and insurance. Fifty percent of any excess rent received above the per square foot amount that the Company pays will be remitted to the Company’s landlord less the allocation of any shared expenses and leasehold improvements specific to the sublease. The estimated amount the Company expects to remit to the landlord each future year of the sublease is $6,100 per year. The sublease commenced on October 1, 2021 and will run through September 30, 2025 which is the end of the Company’s lease term with its landlord. Below are the future payments (in thousands) expected under the sublease net of the estimated annual service cost of $2,220:

 SCHEDULE OF SUB LEASES

		Year ended September 30,
2024		$	28
2025			29
Total undiscounted cash flows		$	57

 

11

 

NOTE 7—COMMITMENTS AND CONTINGENCIES

 

The Company has $250,000 in operating lease obligations payable through 2025 and $15,000 in other contractual obligations. The Company also had $603,000 in open purchase order commitments payable through October 2023.

 

NOTE 8—EQUITY

 

(a) General

 

Reverse Stock Split

 

On September 5, 2023, the Board of Directors of Acorn approved a Certificate of Amendment to Acorn’s Restated Certificate of Incorporation that provided for a 1-for-16 reverse stock split of Acorn’s Common Stock. See Note 1 for related details. At September 30, 2023, Acorn had issued and outstanding 2,484,791 shares of its common stock, par value $0.01 per share. Holders of outstanding common stock are entitled to receive dividends when and if declared by the Board and to share ratably in the assets of the Company legally available for distribution in the event of a liquidation, dissolution or winding up of the Company.

 

The Company is not authorized to issue preferred stock. Accordingly, no preferred stock is issued or outstanding.

 

(b) Summary Employee Option Information

 

The Company’s stock option plans provide for the grant to officers, directors and employees of options to purchase shares of common stock. The purchase price may be paid in cash or, if the option is “in-the-money” at the end of the option term, it is automatically exercised “net”. In a net exercise of an option, the Company does not require a payment of the exercise price of the option from the optionee but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Each option is exercisable for one share of the Company’s common stock. Most options expire within five to ten years from the date of the grant, and generally vest over a three-year period from the date of the grant.

 

At September 30, 2023, 77,540 options were available for grant under the Amended and Restated 2006 Stock Incentive Plan and no options were available for grant under the 2006 Stock Option Plan for Non-Employee Directors. During the nine months ended September 30, 2023, 13,436 options were issued. No options were issued in the three months ended September 30, 2023. The options were issued as follows: an aggregate of 3,437 to directors (excluding the CEO), 2,187 to the CEO, 6,250 to the CFO and an aggregate of 1,562 to employees. In the nine and three months ended September 30, 2023, there were no grants to non-employees (other than the directors, CEO and CFO).

 

No options were exercised in the nine and three months ended September 30, 2023. The intrinsic value of options outstanding and of options exercisable at September 30, 2023 was $38,000. The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the respective years (all in weighted averages):

 SCHEDULE OF BLACK-SCHOLES OPTION PRICING ESTIMATE FAIR VALUE

		Number of Options (in shares)				Weighted Average Exercise Price Per Share				Weighted Average Remaining Contractual Life				Aggregate Intrinsic Value
Outstanding at December 31, 2022			58,966			$	6.71				4.3 years			$	16,000
Granted			13,436				5.24
Exercised			—				—
Forfeited or expired			(1,280	)			6.48
Outstanding at September 30, 2023			71,122			$	6.44				4.2 years			$	46,000
Exercisable at September 30, 2023			61,786			$	6.49				3.9 years			$	38,000

 

12

 

The fair value of the options granted of $46,000 was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

SCHEDULE OF STOCK OPTIONS FAIR VALUE ASSUMPTIONS ESTIMATED USING BLACK-SCHOLES 

Risk-free interest rate			3.9	%
Expected term of options			4.1 years
Expected annual volatility			94.5	%
Expected dividend yield			—	%

 

(c) Stock-based Compensation Expense

 

Stock-based compensation expense included in SG&A expenses in the Company’s unaudited condensed consolidated statements of operations was $46,000 and $69,000 for the nine-month periods ended September 30, 2023 and 2022, respectively, and $16,000 and $16,000 for the three-month periods ended September 30, 2023 and 2022, respectively.

 

The total compensation cost related to non-vested awards not yet recognized was $17,000 and $43,000 as of September 30, 2023 and 2022, respectively.

 

(d) Warrants

 

The Company previously issued warrants at exercise prices equal to or greater than the market value of the Company’s common stock at the date of issuance. A summary of warrant activity follows:

 SUMMARY OF WARRANT ACTIVITY

		Number of Warrants (in shares)				Weighted Average Exercise Price Per Share				Weighted Average Remaining Contractual Life
Outstanding at December 31, 2022			2,187			$	2.08				2.5 months
Granted			—				—
Exercised			(2,187	)			2.08
Forfeited or expired			—				—
Outstanding at September 30, 2023			—			$	—				—

 

NOTE 9— SEGMENT REPORTING

 

As of September 30, 2023, the Company operates in two reportable operating segments, both of which are performed through the Company’s OmniMetrix subsidiary:

 

	●	Power Generation (“PG”). OmniMetrix’s PG services provide wireless remote monitoring and control systems and IoT applications for residential and commercial/industrial power generation equipment. This includes OmniMetrix’s AIRGuard product, which remotely monitors and controls industrial air compressors, and its Smart Annunciator product, which is typically sold to commercial customers that require a visual representation of the generator’s status and has a touchscreen display that indicates the current state of that generator.
	●	Cathodic Protection (“CP”). OmniMetrix’s CP services provide remote monitoring and control products for cathodic protection systems on oil and gas pipelines serving the gas utilities market and pipeline operators. The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. OmniMetrix also offers the industry’s first RADTM (Remote AC Mitigation Disconnect) that mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools, which can drastically reduce a company’s expense while increasing employee safety.

 

13

 

The Company’s reportable segments are strategic business units, offering different products and services, and are managed separately as each business requires different technology and marketing strategies.

 

The following tables represent segmented data for the nine-month and three-month periods ended September 30, 2023 and 2022 (in thousands):

 SUMMARY OF SEGMENTED DATA

		PG				CP				Total
Nine months ended September 30, 2023:
Revenues from external customers		$	4,994			$	815			$	5,809
Segment gross profit			3,876				480				4,356
Depreciation and amortization			99				16				115
Segment income (loss) before income taxes		$	891			$	(35	)		$	856
Nine months ended September 30, 2022:
Revenues from external customers		$	4,335			$	820			$	5,155
Segment gross profit			3,256				463				3,719
Depreciation and amortization			72				13				85
Segment income (loss) before income taxes*		$	340			$	(103	)		$	237
Three months ended September 30, 2023:
Revenues from external customers		$	1,798			$	289			$	2,087
Segment gross profit			1,381				169				1,550
Depreciation and amortization			36				5				41
Segment income before income taxes		$	361			$	5			$	366
Three months ended September 30, 2022:
Revenues from external customers		$	1,510			$	273			$	1,783
Segment gross profit			1,092				123				1,215
Depreciation and amortization			31				5				36
Segment income (loss) before income taxes		$	78			$	(58	)		$	20

 

*	Software impairment of $51,000 is not related to a specific segment and, thus, is not included in the “Total net income before income taxes for reportable segments” for the nine months ended September 30, 2022

 

The Company does not currently break out total assets by reportable segment as there is a high level of shared utilization between the segments. Further, the Chief Decision Maker does not review the assets by segment.

 

Reconciliation of Segment Income (Loss) to Consolidated Net Income (Loss) Before Income Taxes

 SCHEDULE OF RECONCILIATION OF SEGMENT DATA TO CONSOLIDATED STATEMENT OF OPERATIONS

		2023				2022				2023				2022
		Nine months ended September 30,								Three months ended September 30,
		2023				2022				2023				2022
Total net income before income taxes for reportable segments		$	856			$	237			$	366			$	20
Unallocated software impairment							(51	)
Unallocated cost of corporate headquarters			(814	)			(741	)			(339	)			(230	)
Consolidated net income (loss) before income taxes		$	42			$	(555	)		$	27			$	(210	)

 

14

 

NOTE 10—REVENUE

 

The following table disaggregates the Company’s revenue for the nine-month and three-month periods ended September 30, 2023 and 2022 (in thousands):

 SCHEDULE OF DISAGGREGATES OF REVENUE

		Hardware				Monitoring				Total
Nine months ended September 30, 2023:
PG Segment		$	2,017			$	2,977			$	4,994
CP Segment			620				195				815
Total Revenue		$	2,637			$	3,172			$	5,809

 

		Hardware				Monitoring				Total
Nine months ended September 30, 2022:
PG Segment		$	1,610			$	2,725			$	4,335
CP Segment			631				189				820
Total Revenue		$	2,241			$	2,914			$	5,155

 

		Hardware				Monitoring				Total
Three months ended September 30, 2023:
PG Segment		$	780			$	1,018			$	1,798
CP Segment			224				65				289
Total Revenue		$	1,004			$	1,083			$	2,087

 

		Hardware				Monitoring				Total
Three months ended September 30, 2022:
PG Segment		$	608			$	902			$	1,510
CP Segment			217				56				273
Total Revenue		$	825			$	958			$	1,783

 

Deferred revenue activity for the nine months ended September 30, 2023 can be seen in the table below (in thousands):

SCHEDULE OF DEFERRED REVENUE ACTIVITY 

		Hardware				Monitoring				Total
Balance at December 31, 2022		$	3,751			$	2,420			$	6,171
Additions during the period			1,597				3,436				5,033
Recognized as revenue			(1,821	)			(3,172	)			(4,993	)
Balance at September 30, 2023		$	3,527			$	2,684			$	6,211
Amounts to be recognized as revenue in the twelve-month-period ending:
September 30, 2024		$	2,023			$	2,247			$	4,270
September 30, 2025			1,179				433				1,612
September 30, 2026 and thereafter			325				4				329
		$	3,527			$	2,684			$	6,211

 

15

 

The amount of hardware revenue recognized during the nine months ended September 30, 2023 that was included in deferred revenue at the beginning of the fiscal year was $1,469,000. The amount of monitoring revenue during the nine months ended September 30, 2023 that was included in deferred revenue at the beginning of the fiscal year was $1,890,000.

 SCHEDULE OF RECONCILIATION OF HARDWARE REVENUE

Reconciliation of Hardware Revenue		2023				2022				2023				2022
		Nine months ended September 30,								Three months ended September 30,
Reconciliation of Hardware Revenue		2023				2022				2023				2022
Amortization of deferred revenue		$	1,821			$	1,658			$	629			$	631
Sales of custom designed units and related accessories			135				—				43				—
Hardware sales (new product versions)			150				—				150				—
Other accessories, services, shipping and miscellaneous charges			531				583				182				194
Total hardware revenue		$	2,637			$	2,241			$	1,004			$	825

 

Deferred charges relate only to the sale of equipment. Deferred charges activity for the nine months ended September 30, 2023 can be seen in the table below (in thousands):

 SCHEDULE OF DEFERRED CHARGES ACTIVITY

Balance at December 31, 2022		$	1,694
Additions, net of adjustments, during the period			655
Recognized as COGS			(817	)
Balance at September 30, 2023		$	1,532
Amounts to be recognized as COGS in the twelve-month-period ending:
September 30, 2024		$	890
September 30, 2025			507
September 30, 2026 and thereafter			135
		$	1,532

 

SCHEDULE OF RECONCILIATION OF COGS EXPENSE 

Reconciliation of COGS Expense		2023				2022				2023				2022
		Nine months ended September 30,								Three months ended September 30,
Reconciliation of COGS Expense		2023				2022				2023				2022
Amortization of deferred COGS		$	817			$	793			$	277			$	309
COGS of custom designed units and related accessories			34				—				11				—
COGS of hardware sales (new product versions)			66				—				66				—
Data costs for monitoring			224				250				76				93
Other COGS of accessories, services, shipping and miscellaneous charges			312				393				107				166
Total COGS expense		$	1,453			$	1,436			$	537			$	568

 

The following table provides a reconciliation of the Company’s sales commissions contract assets for the nine-month period ended September 30, 2023 (in thousands):

 SCHEDULE OF SALES COMMISSIONS CONTRACT ASSETS

		Hardware				Monitoring				Total
Balance at December 31, 2022		$	319			$	80			$	399
Additions during the period			148				43				191
Amortization of sales commissions			(149	)			(27	)			(176	)
Balance at September 30, 2023		$	318				96				414

 

The capitalized sales commissions are included in other current assets ($218,000) and other assets ($196,000) in the Company’s unaudited condensed consolidated balance sheets as of September 30, 2023. The capitalized sales commissions are included in other current assets ($196,000) and other assets ($203,000) in the Company’s condensed consolidated balance sheet at December 31, 2022.

 

Amounts to be recognized as sales commission expense in the twelve-month-period ending:

 SCHEDULE OF SALES COMMISSIONS EXPENSE

September 30, 2024		$	218
September 30, 2025			138
September 30, 2026 and thereafter			58
Total		$	414

 

16

 

The contract assets of deferred COGS and deferred sales commissions are subject to review under ASU 2016-13, see Notes 2 and 4; however, no credit losses on contract assets are expected based on the Company’s implementation of ASU 2016-13.

 

Commissions earned from the sales of the new hardware products will be recognized when the product is shipped.

 

NOTE 11—RELATED PARTY BALANCES AND TRANSACTIONS

 

Officer and Director Fees

 

The Company recorded fees to officers of $391,000 and $391,000 for the nine months ended September 30, 2023 and 2022, respectively, and $131,000 and $130,000 for the three months ended September 30, 2023 and 2022, respectively, which are included in SG&A expenses.

 

The Company recorded fees to directors of $52,000 and $44,000 for the nine months ended September 30, 2023 and 2022, respectively, and $18,000 and $15,000 for the three months ended September 30, 2023 and 2022, respectively, which are included in SG&A expenses.

Intercompany

 

The intercompany balance due to Acorn from OmniMetrix for amounts loaned, accrued interest and expenses paid by Acorn on OmniMetrix’s behalf was $2,928,000 as of September 30, 2023 as compared to $3,677,000 as of December 31, 2022. During the nine months ended September 30, 2023, the intercompany amount due to Acorn from OmniMetrix decreased by $749,000. This included repayments of $961,000 offset by interest of $134,000 and dividends of $57,000 due to Acorn and $21,000 in shared expenses paid by Acorn. During the nine months ended September 30, 2022, the intercompany amount due to Acorn from OmniMetrix decreased by $447,000. This included repayments of $780,000 offset by interest of $134,000, dividends of $57,000 due to Acorn and $142,000 in shared expenses paid by Acorn. The intercompany balances are eliminated in consolidation.

 

 

ACORN ENERGY, INC.

 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This Form 10-Q contains “forward-looking statements” relating to the Company which represent the Company’s current expectations or beliefs including, but not limited to, statements concerning the Company’s operations, performance, financial condition and growth. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as “may”, “anticipate”, “intend”, “could”, “estimate” or “continue” or the negative or other comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, such as credit losses, dependence on management and key personnel, variability of quarterly results, and the ability of the Company to continue its growth strategy and the Company’s competition, certain of which are beyond the Company’s control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, or any of the other risks set out under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 occur, actual outcomes and results could differ materially from those indicated in the forward-looking statements.

 

Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

 

All dollar amounts in the discussion below are rounded to the nearest thousand and, thus, are approximate.

 

FINANCIAL RESULTS BY COMPANY

 

The following table shows, for the periods indicated, the financial results (dollar amounts in thousands) attributable to each of our consolidated companies.

 

		Nine months ended September 30, 2023
		OmniMetrix				Acorn				Total
Revenue		$	5,809			$	—			$	5,809
COGS			1,453				—				1,453
Gross profit			4,356				—				4,356
Gross profit margin			75	%							75	%
R&D expense			614				—				614
SG&A expense			2,932				814				3,746
Operating income (loss)		$	810			$	(814	)		$	(4	)

 

		Nine months ended September 30, 2022
		OmniMetrix				Acorn				Total
Revenue		$	5,155			$	—			$	5,155
COGS			1,436				—				1,436
Gross profit			3,719				—				3,719
Gross profit margin			72	%							72	%
R&D expense			637				—				637
SG&A expense			2,845				740				3,585
Impairment of software			51				—				51
Operating income (loss)		$	186			$	(740	)		$	(554	)

 

 

		Three months ended September 30, 2023
		OmniMetrix				Acorn				Total
Revenue		$	2,087			$	—			$	2,087
COGS			537				—				537
Gross profit			1,550				—				1,550
Gross profit margin			74	%							74	%
R&D expense			212				—				212
SG&A expense			990				340				1,330
Operating income (loss)		$	348			$	(340	)		$	8

 

		Three months ended September 30, 2022
		OmniMetrix				Acorn				Total
Revenue		$	1,783			$	—			$	1,783
COGS			568				—				568
Gross profit			1,215				—				1,215
Gross profit margin			68	%							68	%
R&D expense			227				—				227
SG&A expense			968				230				1,198
Operating loss		$	20			$	(230	)		$	(210	)

 

BACKLOG

 

As of September 30, 2023, OmniMetrix had a backlog of $6,211,000, primarily comprised of deferred revenue, of which $4,270,000 is expected to be recognized as revenue in the next twelve months. This compares to a backlog of $6,053,000 at September 30, 2022. Now that we are selling hardware units that are capable of being distinct, the hardware backlog will no longer continue to grow and will be fully amortized by August 31, 2026, while the monitoring backlog will continue to be deferred and amortized over the period of service.

 

RECENT DEVELOPMENTS

 

On March 17, 2021, we entered into a master services agreement for the development of a new user interface for our customer data portal. As of September 30, 2023, we have invested $178,000 in design, development and quality assurance services of the new user interface. We deployed the new interface and made it available to our customers on October 1, 2023. Our customers have the option to continue to use the “classic view” of our user interface, which is our original user interface, or our new user interface known as “OV2” until December 31, 2023 when we will officially terminate our original user interface. The cost of this project was capitalized, and amortization began on October 1, 2023 when it was deployed.

 

In July 2022, we announced a partnership between OmniMetrix, CPower Energy Management (“CPower”), and Power Solutions Specialists TX (“PSS”) designed to help homeowners that install next-generation standby generators to earn compensation for offering grid relief, known as “demand response,” to the Electric Reliability Council of Texas (“ERCOT”). CPower’s demand response solutions, combined with OmniMetrix’s remote control capabilities, allow the shifting of electricity production to PSS’s best-in-class residential standby generators for a few hours each year when the grid is stressed or ERCOT energy pricing is high, without the homeowner needing to take any action. Homeowners are compensated for signing up and possibly supplying grid offload by running their generators for up to 12 hours per year. We are currently assisting PSS to market the demand response program to generator owners and will incentivize existing generator owners who sign up and satisfy certain terms and conditions by offering a one-time rebate of $200 to anyone who signs up before March 31, 2024.

 

On September 1, 2023, we launched an updated version of our products that includes new functionality in our TrueGuard, AIRGuard, Patriot and Hero products that allows our customers to have options as it relates to obtaining and utilizing the data that is provided by our hardware devices. This new functionality allows for SIM card options, configuration options regarding IP address endpoints and DNS routes, and access to our over-the-air data protocol. This product update allows customers to have the option to purchase our monitoring service, monitor the products themselves if they have the ability in-house, or choose another monitoring provider if they so desire, whereas, historically, our standard products only functioned with our monitoring services. The modification to the circuit boards and embedded firmware of hardware enclosures in stock as of August 31, 2023 were made such that only the new version of these products was sold subsequent to this date.

 

 

On September 5, 2023, the Board of Directors of Acorn approved a Certificate of Amendment to Acorn’s Restated Certificate of Incorporation (the “Certificate of Amendment”) that provided for a 1-for-16 reverse stock split of Acorn’s Common Stock (the “Reverse Stock Split”). Acorn filed the Certificate of Amendment with the Secretary of State of the State of Delaware on September 6, 2023, and the Reverse Stock Split became effective at 5:00 p.m. EDT on September 7, 2023. The Reverse Stock Split increased the market price of Acorn’s Common Stock and makes Acorn’s shares accessible to a broader range of investors, including institutions and those unable to purchase or recommend low-priced stocks. At the effective time of the Reverse Stock Split, every sixteen issued and outstanding shares of Acorn’s Common Stock were automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. Stockholders who would have otherwise been entitled to fractional shares of Common Stock as a result of the Reverse Stock Split received a cash payment in lieu of receiving fractional shares. The value of the fractional shares repurchased was $347 and equated to fifty-eight shares. All share and per-share amounts of common stock, options and warrants contained in this Management’s Discussion and Analysis have been restated for all periods to give retroactive effect to the Reverse Stock Split and the related fractional share repurchase for all prior periods presented.

 

On November 7, 2023, we entered into a non-exclusive reseller agreement with one of the nation’s largest commercial generator dealers with regional dealerships throughout the United States. We believe this agreement could yield 2,500 to 3,000 new monitoring connections per year for OmniMetrix, which could represent hardware sales, start-up fees and monitoring revenue of $1 million to $2 million per year in the aggregate. Importantly, endpoints added from this relationship are expected to make a meaningful contribution to the growth of our base of recurring monitoring revenue. We expect initial revenue from this relationship to start in the first quarter of 2024 and to build as the program is rolled out across their dealer network. 

 

OVERVIEW AND TREND INFORMATION

 

Acorn Energy, Inc. (“Acorn” or “the Company”) is a holding company focused on technology-driven solutions for energy infrastructure asset management. We provide the following services and products through our OmniMetrix^TM, LLC (“OmniMetrix”) subsidiary:

 

	●	Power Generation (“PG”). OmniMetrix’s PG services provide wireless remote monitoring and control systems and IoT applications for residential and commercial/industrial power generation equipment. This includes our AIRGuard product, which remotely monitors and controls industrial air compressors, and our Smart Annunciator product, which is typically sold to commercial customers that require a visual representation of the generator’s status and has a touchscreen display that indicates the current state of that generator.
	●	Cathodic Protection (“CP”). OmniMetrix’s CP services provide remote monitoring and control products for cathodic protection systems on oil and gas pipelines serving the gas utilities market and pipeline operators. The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. OmniMetrix also offers the industry’s first RADTM (Remote AC Mitigation Disconnect) that mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools, which can drastically reduce a company’s expense while increasing employee safety.

 

Each of our PG and CP activities represents a reportable segment. The following analysis should be read together with the segment and revenue information provided in Notes 9 and 10 to the unaudited condensed consolidated financial statements included in this quarterly report.

 

OmniMetrix

 

OmniMetrix is a Georgia limited liability company based in Buford, Georgia that develops and markets wireless remote monitoring and control systems and services for multiple markets in the Internet of Things (“IoT”) ecosystem: critical assets (including stand-by power generators, pumps, pumpjacks, light towers, turbines, compressors, and other industrial equipment) as well as cathodic protection for the pipeline industry (gas utilities and pipeline companies). Acorn owns 99% of OmniMetrix with 1% owned by the former CEO of OmniMetrix.

 

Following the emergence of machine-to-machine (M2M) and IoT applications, whereby companies aggregate multiple sensors and monitors into a simplified dashboard for customers, OmniMetrix believes it plays a key role in this new economic ecosystem. In addition, OmniMetrix sees a rapidly growing need for backup power infrastructure to secure critical military, government, and private sector assets against emergency events including terrorist attacks, natural disasters, cybersecurity threats, and other issues related to the reliability of the electric power grid. As residential and industrial standby generators, turbines, compressors, pumps, pumpjacks, light towers and other industrial equipment are part of the critical infrastructure increasingly becoming monitored in IoT applications and given that OmniMetrix monitors all major brands of critical equipment, OmniMetrix believes it is well-positioned as a competitive participant in this market.

 

 

OmniMetrix sells monitoring hardware devices and data monitoring services. Prior to the product modification discussed above under Recent Developments, revenue (and related costs) associated with sale of equipment was recorded to deferred revenue (and deferred charges) upon shipment for PG and CP monitoring units. This deferred revenue and the deferred cost of the hardware with respect to the sale of new equipment was recognized over the life of the units, which was estimated to be three years. Revenue from hardware sales subsequent to August 31, 2023 is recognized upon shipment, instead of being deferred, as discussed above under Recent Developments. Revenues from the prepayment of monitoring fees (generally paid in advance) are initially recorded as deferred revenue upon receipt of payment from the customer and then amortized to revenue over the monitoring service period (typically twelve-month, renewable periods).

 

Results of Operations

 

The following table sets forth certain information with respect to the unaudited condensed consolidated results of operations of the Company for the nine-month periods ended September 30, 2023 and 2022, including the percentage of total revenues during each period attributable to selected components of the Statements of Operations data and for the period-to-period percentage changes in such components. For segment data, see Notes 9 and 10 to the unaudited condensed consolidated financial statements included in this quarterly report.

 

		Nine months ended September 30,
		2023								2022								Change
		($,000)				% of revenues				($,000)				% of revenues				From 2022 to 2023
Revenue		$	5,809				100	%		$	5,155				100	%			13	%
COGS			1,453				25	%			1,436				28	%			1	%
Gross profit			4,356				75	%			3,719				72	%			17	%
R&D expense			614				11	%			637				12	%			(4	)%
SG&A expense			3,746				64	%			3,585				70	%			4	%
Impairment of software			—				—	%			51				1	%			(100	)%
Operating loss			(4	)			(*	)%			(554	)			(11	)%			(99	)%
Interest income (expense), net			46				1	%			(1	)			*	%			(4700	)%
Income (loss) before income taxes			42				1	%			(555	)			(11	)%			(108	)%
Income tax expense			—				—				—				—	%			—
Net income (loss)			42				1	%			(555	)			(11	)%			(108	)%
Less: Non-controlling interest share of net income			7				*	%			1				*	%			600	%
Net income (loss) attributable to Acorn Energy, Inc.		$	35				1	%		$	(556	)			(11	)%			(106	)%

 

 

*result is less than 1%.

 

The following table sets forth certain information with respect to the unaudited consolidated results of operations of the Company for the three-month periods ended September 30, 2023 and 2022, including the percentage of total revenues during each period attributable to selected components of the operations statement data and for the period-to-period percentage changes in such components. For segment data, see Notes 9 and 10 to the unaudited condensed consolidated financial statements included in this quarterly report.

 

 

		Three months ended September 30,
		2023								2022								Change
		($,000)				% of revenues				($,000)				% of revenues				from 2022 to 2023
Revenue		$	2,087				100	%		$	1,783				100	%			17	%
COGS			537				26	%			568				32	%			(5	)%
Gross profit			1,550				74	%			1,215				68	%			28	%
R&D expense			212				10	%			227				13	%			(7	)%
SG&A expense			1,330				64	%			1,198				67	%			11	%
Operating income (loss)			8				*	%			(210	)			(12	)%			104	%
Interest income, net			19				1	%			—				—	%			100	%
Income (loss) before income taxes			27				1	%			(210	)			(12	)%			(113	)%
Income tax expense			—				—	%			—				—	%			—	%
Net income (loss)			27				1	%			(210	)			(12	)%			(113	)%
Less: Non-controlling interest share of net income			3				*	%			**				*	%			*	%
Net income (loss) attributable to Acorn Energy, Inc.		$	24				1	%		$	(210	)			(12	)%			(111	)%

 

 

*result is less than 1%.

**less than $1

 

Revenue for the nine and three months ended September 30, 2023 and 2022

 

In the nine months ended September 30, 2023, revenue increased by $654,000, or 13%, from $5,155,000 in the nine months ended September 30, 2022 to $5,809,000 in the nine months ended September 30, 2023. Hardware revenue increased by $396,000 from $2,241,000 in the nine months ended September 30, 2022 to $2,637,000 in the nine months ended September 30, 2023. During the nine months ended September 30, 2023, we recorded $136,000 in revenue from the sale of custom TG Pro units and related accessories that are designed to large customer specifications and monitored by the customer. We did not have any custom unit orders in the first nine months ended September 30, 2022. The hardware revenue during the nine months ended September 30, 2023 is further detailed in the table below:

 

		Nine months ended September 30,								Three months ended September 30,
Reconciliation of Hardware Revenue		2023				2022				2023				2022
Amortization of deferred revenue		$	1,821			$	1,658			$	629			$	631
Sales of custom designed units and related accessories			135				—				43				—
Hardware sales (new product versions)			150				—				150				—
Other accessories, services, shipping and miscellaneous charges			531				583				182				194
Total hardware revenue		$	2,637			$	2,241			$	1,004			$	825

 

The increase in hardware revenue was due to the sale of custom PG units (as noted above) and increased sales of other PG products as well as from installation income realized, offset by a decrease in revenue from Hero products as sales of CP products were down period over period. Monitoring revenue increased by $258,000, or 9%, from $2,914,000 in the nine months ended September 30, 2022 to $3,172,000 in the nine months ended September 30, 2023. The increase in monitoring revenue was due to an increase in the number of connections being monitored and growth in our customer base.

 

 

As discussed above, OmniMetrix has two reportable segments, PG and CP. Of the $5,809,000 in revenue recognized in the nine months ended September 30, 2023, $4,994,000 was generated by PG activities and $815,000 was generated by CP activities. This represents an increase in revenue from PG activities of $659,000, or 15%, from $4,435,000 in the nine months ended September 30, 2022, and a decrease in revenue from CP activities of $5,000, or 1%, from $820,000 in the nine months ended September 30, 2022. As noted above, the increase in PG revenue was due to the sale of custom units, an increase in the sale of other PG products and growth in our customer base. Revenue increased by $304,000, or 17%, from $1,783,000 in the three months ended September 30, 2022 to $2,087,000 in the three months ended September 30, 2023. The increase is due to the same drivers in the nine-month period as previously discussed.

 

Of the $2,087,000 in revenue recognized in the three months ended September 30, 2023, $1,798,000 was generated by PG activities and $289,000 was generated by CP activities. As compared to the three months ended September 30, 2022, revenue from PG activities increased $288,000, or 19%, and revenue from CP activities increased $16,000, or 6%.

 

Gross profit for the nine and three months ended September 30, 2023 and 2022

 

Gross profit for the nine months ended September 30, 2023 was $4,356,000, reflecting a gross margin of 75%, compared with a gross profit of $3,719,000, reflecting a gross margin of 72%, for the nine months ended September 30, 2022.

 

Gross margin on hardware revenue for the nine months ended September 30, 2023 was 53% compared to 47% for the nine months ended September 30, 2022. Gross margin on monitoring revenue for the nine months ended September 30, 2023 was 93% compared to 91% for the nine months ended September 30, 2022.

 

Gross profit for the three months ended September 30, 2023 was $1,550,000, reflecting a gross margin of 74%, compared with a gross profit for the three months ended September 30, 2022 of $1,215,000, reflecting a gross margin of 68%. Gross margin on hardware revenue for the three months ended September 30, 2023 was 54% compared to 43% for the three months ended September 30, 2022. Cost of sales in the three and nine months ended September 30, 2022 included a write-off of $31,000 in obsolete CP parts inventory which was the primary reason for lower gross margin during these prior year periods. Gross margin on monitoring revenue for the three months ended September 30, 2023 was 93% compared to 90% for the three months ended September 30, 2022. The lower monitoring gross margin in the prior year periods was due to monitoring rebates that were given to two large customers during the three months ended September 30, 2022.

 

Operating expenses for the nine and three months ended September 30, 2023 and 2022

 

OmniMetrix R&D expense. During the nine months ended September 30, 2023 and 2022, R&D expense was $614,000 and $637,000, respectively. During the three months ended September 30, 2023, OmniMetrix recorded $212,000 of R&D expense as compared to $227,000 in the three months ended September 30, 2022. The decrease in R&D expense in the nine months ended September 30, 2023 of $23,000 is due to a reduction of R&D hours related to the phased retirement of one of our engineers partially offset by increased engineering consulting expenses.

 

OmniMetrix SG&A expense. During the nine months ended September 30, 2023, OmniMetrix recorded SG&A expense of $2,932,000, compared to SG&A expense of $2,845,000 in the nine months ended September 30, 2022, an increase of $87,000, or 3%. During the three months ended September 30, 2023, OmniMetrix recorded SG&A expense of $990,000, compared to SG&A expense of $968,000 in the three months ended September 30, 2022, an increase of $22,000, or 2%. The increase in the nine-month period was primarily due to an increase of (i) $45,000 in sales commission amortization, (ii) $30,000 in amortization primarily related to IT assets, (iii) $83,000 in personnel costs, (iv) $5,000 in net aggregate increases in other expense categories, offset by decreases of (v) $66,000 in technology consulting and software license fees and (vi) $10,000 in travel and trade show expenses.

 

During September 2022, we conducted an evaluation of the status of an ERP software customization project that had been initiated in July 2019 and was ongoing. As a result of this evaluation, we elected to terminate this project effective September 30, 2022 and recorded an impairment against the capitalized investment in this project of $51,000.

 

 

Corporate SG&A expense. Corporate SG&A expense was $814,000 in the nine months ended September 30, 2023, an increase of $74,000, or 10%, from the $740,000 of corporate SG&A expense reported in the nine months ended September 30, 2022. This increase was due to $102,000 in expenses related to the execution of the reverse stock split offset by a decrease of (i) $15,000 in audit fees due to the timing of when the services were performed as some were performed in the fourth quarter of 2022 versus first quarter of 2023, (ii) $20,000 in stock compensation expense, (iii) $9,000 in insurance expenses offset by a net increase of (iv) $16,000 in other public company expenses.

 

Corporate SG&A expense for the three months ended September 30, 2023 increased $110,000, or 48%, to $340,000 from $230,000 in the three months ended September 30, 2022 primarily due to $102,000 in expenses related to the execution of the reverse stock split. Third quarter 2023 corporate SG&A expense of $340,000 was higher by $100,000 than second quarter 2023 corporate SG&A expense of $240,000 due to the expenses related to the execution of the reverse stock split which were incurred in the third quarter of 2023. We expect the quarterly corporate overhead to increase in future quarters due to increased audit fees and board fees in addition to costs that may be required to support the growth of our OmniMetrix subsidiary.

 

Net income (loss) attributable to Acorn Energy. We recognized net income attributable to Acorn stockholders of $35,000 in the nine months ended September 30, 2023, compared to net loss attributable to Acorn stockholders of $556,000 in the nine months ended September 30, 2022. Our net income during the nine months ended September 30, 2023 is comprised of net income at OmniMetrix of $856,000 offset by corporate expenses of $814,000 and the non-controlling interest share of our income from OmniMetrix of $7,000. Our net loss during the nine months ended September 30, 2022 is comprised of net income at OmniMetrix of $52,000 offset by corporate expenses, including net interest expense, of $607,000 and the non-controlling interest share of our income from OmniMetrix of $1,000.

 

For the three months ended September 30, 2023, we recognized net income attributable to Acorn stockholders of $24,000, compared to a net loss attributable to Acorn stockholders of $210,000 for the three months ended September 30, 2022. Our net income during the three months ended September 30, 2023 is comprised of net income at OmniMetrix of $366,000 offset by corporate expenses of $339,000 and the non-controlling interest share of our income from OmniMetrix of $3,000. Our net loss in the three months ended September 30, 2022 is comprised of net income at OmniMetrix of $19,000 offset by corporate expenses of $229,000. The non-controlling interest share of OmniMetrix during this period was less than $1,000 and rounded to zero.

 

Liquidity and Capital Resources

 

At September 30, 2023, we had negative working capital of $513,000. Our working capital includes $1,749,000 of cash and deferred revenue of $4,270,000. The deferred revenue does not require a significant cash outlay for the revenue to be recognized.

 

During the nine months ended September 30, 2023, our OmniMetrix subsidiary provided $1,098,000 from operations while our corporate headquarters used $732,000 during the same period.

 

During the nine months ended September 30, 2023, we invested $72,000 in technology and other capital projects and received proceeds of $5,000 from financing activities related to the exercise of warrants.

 

Other Liquidity Matters

 

OmniMetrix owes Acorn $2,928,000 for loans, accrued interest and expenses advanced to it by Acorn. OmniMetrix made repayments to Acorn of $961,000 in the nine months ended September 30, 2023 offset by interest, dividends and other advances of $212,000 in the aggregate. The intercompany balances are eliminated in consolidation.

 

As of November 7, 2023, we had cash of $1,684,000. We believe that such cash, plus the cash generated from operations, will provide sufficient liquidity to finance the operating activities of Acorn and OmniMetrix at their current level of operations for the twelve months from the issuance of these unaudited condensed consolidated financial statements. We may, at some point, elect to obtain a new line of credit or other source of financing to fund additional investments in the business.

 

 

Contractual Obligations and Commitments

 

The table below provides information concerning obligations under certain categories of our contractual obligations as of September 30, 2023.

 

CASH PAYMENTS DUE TO CONTRACTUAL OBLIGATIONS

 

		Twelve Month Periods Ending September 30, (in thousands)
		Total				2024				2025-2026				2027-2028				2029 and thereafter
Software agreements		$	8			$	8			$	—			$	—			$	—
Operating leases*			261				130				131				—				—
Contractual services			7				7				—				—				—
Purchase commitments**			603				603				—				—				—
Total contractual cash obligations		$	879			$	748			$	131			$	—			$	—

 

*Reflects the gross amount of the operating lease liabilities. Does not include rent amounts to be received under the sublease and it is gross of the imputed interest of $11,000.

 

**Reflects open purchase orders for components/parts to be delivered over the next twelve months as sales forecast requires.

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

 

Concentrations of Credit Risk

 

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and trade accounts receivable. The Company’s cash was deposited with a U.S. bank and amounted to $1,749,000 at September 30, 2023. The Company does not believe there is a significant risk of non-performance by its counterparties. For the three-month period ended September 30, 2023, there were no customers that represented greater than 10% of the Company’s total invoiced sales. For the nine-month period ended September 30, 2023, there was one customer that represented 11% of the Company’s total invoiced sales. At September 30, 2023, the Company did not have any customers that represented greater than 10% of our total accounts receivable. Approximately 12% of the accounts receivable at December 31, 2022 was due from one customer which was subsequently collected in full. Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising the Company’s customer base. Although we do not believe there is significant risk of non-performance by these counterparties, any failures or defaults on their part could negatively impact the value of our financial instruments and could have a material adverse effect on our business, operations or financial condition.

 

Fair Value of Financial Instruments

 

Fair values of financial instruments included in current assets and current liabilities are estimated to approximate their book values due to the short maturity of such investments.

 

ITEM 4.

CONTROLS AND PROCEDURES

 

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective due to material weaknesses noted in our Annual Report on Form 10-K for the year ended December 31, 2022, to ensure that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is (i) accumulated and communicated to our management (including our Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

 

As noted in our Annual Report on Form 10-K for the year ended December 31, 2022, we employ a decentralized internal control methodology, coupled with management’s oversight, whereby our OmniMetrix subsidiary is responsible for mitigating its risks to financial reporting by implementing and maintaining effective control policies and procedures and subsequently translating that respective risk mitigation up and through to the parent level and to our external financial statements. In addition, as our operating subsidiary is not large enough to effectively mitigate certain risks by segregating incompatible duties, management must employ compensating mechanisms throughout our company in a manner that is feasible within the constraints in which it operates.

 

The material weaknesses management identified were caused by an insufficient complement of resources at our OmniMetrix subsidiary and limited ERP system capabilities, such that individual control policies and procedures at the subsidiary could not be implemented, maintained, or remediated when and where necessary. As a result, a majority of the significant process areas management identified for our OmniMetrix subsidiary had one or more material weaknesses present. This condition was further exacerbated as the Company could not demonstrate that each of the principles described within the Committee of Sponsoring Organizations of the Treadway Commission’s document entitled “Internal Control - Integrated Framework (2013)” were present and functioning.

 

Changes in Internal Control Over Financial Reporting

 

There was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II

 

ITEM 6.

EXHIBITS.

 

#3.1	Amended and Restated Certificate of Incorporation of the Registrant
#3.2	Amended By-laws of the Registrant
#31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
#31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
#32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
#32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
#101.1	The following financial statements from Acorn Energy’s Form 10-Q for the quarter ended September 30, 2023, filed on November 9, 2023, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Changes in Deficit, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.
#104.1	Cover Page Interactive Data File (embedded within the Inline XBRL document)
#	This exhibit is filed or furnished herewith.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by its principal financial officer thereunto duly authorized.

 

	ACORN ENERGY, INC.
Dated: November 9, 2023
	By:	/s/ TRACY S. CLIFFORD
		Tracy S. Clifford
		Chief Financial Officer

 

 

 

Exhibit 3.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 31.1

 

I, Jan H. Loeb, the Chief Executive Officer of Acorn Energy, Inc., certify that:

 

	1.	I have reviewed this report on Form 10-Q of Acorn Energy, Inc.;
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: November 9, 2023

 

By:	/s/ JAN H. LOEB
	Jan H. Loeb
	Chief Executive Officer

 

 

 

 

Exhibit 31.2

 

I, Tracy S. Clifford, the Chief Financial Officer of Acorn Energy, Inc., certify that:

 

	1.	I have reviewed this report on Form 10-Q of Acorn Energy, Inc.;
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: November 9, 2023

 

By:	/s/ TRACY S. CLIFFORD
	Tracy S. Clifford
	Chief Financial Officer

 

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of Acorn Energy, Inc. (the “Company”) for the quarterly period ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jan H. Loeb, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

/s/ Jan H. Loeb
Jan H. Loeb
Chief Executive Officer
November 9, 2023

 

 

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of Acorn Energy, Inc. (the “Company”) for the quarterly period ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tracy S. Clifford, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

/s/ Tracy S. Clifford
Tracy S. Clifford
Chief Financial Officer
November 9, 2023

 

 

 

v3.23.3

Cover - shares	9 Months Ended
	Sep. 30, 2023	Nov. 07, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-33886
Entity Registrant Name	ACORN ENERGY, INC.
Entity Central Index Key	0000880984
Entity Tax Identification Number	22-2786081
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1000 N West Street
Entity Address, Address Line Two	Suite 1200
Entity Address, City or Town	Wilmington
Entity Address, State or Province	DE
Entity Address, Postal Zip Code	19801
City Area Code	410
Local Phone Number	654-3315
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,484,791

v3.23.3

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands		Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash		$ 1,749	$ 1,450
Accounts receivable, net		583	597
Inventory, net		909	789
Deferred cost of goods sold (COGS)		890	887
Other current assets		343	288
Total current assets		4,474	4,011
Property and equipment, net		610	653
Operating right-of-use assets, net		220	298
Deferred COGS		642	807
Other assets		209	215
Total assets		6,155	5,984
Current liabilities:
Accounts payable		444	243
Accrued expenses		127	171
Deferred revenue		4,270	3,984
Operating lease liabilities		121	116
Other current liabilities		25	58
Total current liabilities		4,987	4,572
Long-term liabilities:
Deferred revenue		1,941	2,187
Operating lease liabilities		129	220
Other long-term liabilities		19	16
Total long-term liabilities		2,089	2,423
Commitments and contingencies (Note 7)
Acorn Energy, Inc. stockholders
Common stock - $0.01 par value per share: Authorized – 42,000,000 shares; issued and outstanding – 2,484,791 and 2,482,604 shares at September 30, 2023 and December 31, 2022, respectively	[1]	25	25
Additional paid-in capital	[1]	103,312	103,261
Accumulated stockholders’ deficit		(101,232)	(101,267)
Treasury stock, at cost – 50,178 and 50,178 shares at September 30, 2023 and December 31, 2022	[1]	(3,036)	(3,036)
Total Acorn Energy, Inc. stockholders’ deficit		(931)	(1,017)
Non-controlling interest		10	6
Total stockholders’ deficit		(921)	(1,011)
Total liabilities and stockholders’ deficit		$ 6,155	$ 5,984
[1] Includes effects of a 1-for-16 reverse stock split

v3.23.3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	42,000,000	42,000,000
Common stock, shares issued	2,484,791	2,482,604
Common stock, shares outstanding	2,484,791	2,482,604
Treasury stock, shares	50,178	50,178

v3.23.3

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Revenue		$ 2,087	$ 1,783	$ 5,809	$ 5,155
COGS		537	568	1,453	1,436
Gross profit		1,550	1,215	4,356	3,719
Operating expenses:
Research and development (R&D) expense		212	227	614	637
Selling, general and administrative (SG&A) expense		1,330	1,198	3,746	3,585
Impairment of software					51
Total operating expenses		1,542	1,425	4,360	4,273
Operating (loss) income		8	(210)	(4)	(554)
Interest income (expense), net		19		46	(1)
Income (loss) before income taxes		27	(210)	42	(555)
Income tax expense
Net income (loss)		27	(210)	42	(555)
Non-controlling interest share of net income		(3)		(7)	(1)
Net income (loss) attributable to Acorn Energy, Inc. stockholders		$ 24	$ (210)	$ 35	$ (556)
Basic net income (loss) per share	[1]	$ 0.01	$ (0.08)	$ 0.01	$ (0.22)
Diluted net income (loss) per share	[1]	$ 0.01	$ (0.08)	$ 0.01	$ (0.22)
Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – basic and diluted
Basic	[1]	2,485	2,481	2,484	2,481
Diluted	[1]	2,532	2,481	2,506	2,481
[1] Includes effects of a 1-for-16 reverse stock split.

v3.23.3

Condensed Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) - USD ($) shares in Thousands, $ in Thousands		Common Stock [Member]		Additional Paid-in Capital [Member]	[1]	Retained Earnings [Member]	Treasury Stock, Common [Member]		Parent [Member]	Noncontrolling Interest [Member]		Total
Balance at Dec. 31, 2021		$ 25	[1]	$ 103,176		$ (100,634)	$ (3,036)	[1]	$ (469)	$ 8		$ (461)
Balance, shares at Dec. 31, 2021	[1]	2,480					50
Net income (loss)			[1]			(123)		[1]	(123)	1		(122)
Accrued dividend on OmniMetrix preferred shares			[1]					[1]		(1)		(1)
Stock option compensation			[1]	31				[1]	31			31
Balance at Mar. 31, 2022		$ 25	[1]	103,207		(100,757)	$ (3,036)	[1]	(561)	8		(553)
Balance, shares at Mar. 31, 2022	[1]	2,480					50
Balance at Dec. 31, 2021		$ 25	[1]	103,176		(100,634)	$ (3,036)	[1]	(469)	8		(461)
Balance, shares at Dec. 31, 2021	[1]	2,480					50
Net income (loss)												(555)
Balance at Sep. 30, 2022		$ 25	[1]	103,250		(101,190)	$ (3,036)	[1]	(951)	6		(945)
Balance, shares at Sep. 30, 2022	[1]	2,482					50
Balance at Mar. 31, 2022		$ 25	[1]	103,207		(100,757)	$ (3,036)	[1]	(561)	8		(553)
Balance, shares at Mar. 31, 2022	[1]	2,480					50
Net income (loss)			[1]			(223)		[1]	(223)		[2]	(223)
Accrued dividend on OmniMetrix preferred shares			[1]					[1]		(1)		(1)
Stock option compensation			[1]	22				[1]	22			22
Balance at Jun. 30, 2022		$ 25	[1]	103,229		(100,980)	$ (3,036)	[1]	(762)	7		(755)
Balance, shares at Jun. 30, 2022	[1]	2,480					50
Net income (loss)			[1]			(210)		[1]	(210)			(210)
Accrued dividend on OmniMetrix preferred shares			[1]					[1]		(1)		(1)
Stock option compensation			[1]	16				[1]	16			16
Proceeds from stock option exercise			[1],[2]	5				[1]	5			5
Balance, shares	[1]	2
Balance at Sep. 30, 2022		$ 25	[1]	103,250		(101,190)	$ (3,036)	[1]	(951)	6		(945)
Balance, shares at Sep. 30, 2022	[1]	2,482					50
Balance at Dec. 31, 2022		$ 25	[1]	103,261		(101,267)	$ (3,036)	[1]	(1,017)	6		(1,011)
Balance, shares at Dec. 31, 2022	[1]	2,483					50
Net income (loss)			[1]			(85)		[1]	(85)	1		(84)
Proceeds from warrant exercise			[1],[2]	5				[1]	5			5
Balance, shares	[1]	2
Accrued dividend on OmniMetrix preferred shares			[1]					[1]		(1)		(1)
Stock option compensation			[1]	17				[1]	17			17
Balance at Mar. 31, 2023		$ 25	[1]	103,283		(101,352)	$ (3,036)	[1]	(1,080)	6		(1,074)
Balance, shares at Mar. 31, 2023	[1]	2,485					50
Balance at Dec. 31, 2022		$ 25	[1]	103,261		(101,267)	$ (3,036)	[1]	(1,017)	6		(1,011)
Balance, shares at Dec. 31, 2022	[1]	2,483					50
Net income (loss)												42
Balance at Sep. 30, 2023		$ 25	[1]	103,312		(101,232)	$ (3,036)	[1]	(931)	10		(921)
Balance, shares at Sep. 30, 2023	[1]	2,485					50
Balance at Mar. 31, 2023		$ 25	[1]	103,283		(101,352)	$ (3,036)	[1]	(1,080)	6		(1,074)
Balance, shares at Mar. 31, 2023	[1]	2,485					50
Net income (loss)			[1]			96		[1]	96	3		99
Accrued dividend on OmniMetrix preferred shares			[1]					[1]		(1)		(1)
Stock option compensation			[1]	13				[1]	13			13
Balance at Jun. 30, 2023		$ 25	[1]	103,296		(101,256)	$ (3,036)	[1]	(971)	8		(963)
Balance, shares at Jun. 30, 2023	[1]	2,485					50
Net income (loss)			[1]			24		[1]	24	3		27
Accrued dividend on OmniMetrix preferred shares			[1]					[1]		(1)		(1)
Stock option compensation			[1]	16				[1]	16			16
Balance at Sep. 30, 2023		$ 25	[1]	$ 103,312		$ (101,232)	$ (3,036)	[1]	$ (931)	$ 10		$ (921)
Balance, shares at Sep. 30, 2023	[1]	2,485					50
[1] Includes effects of a 1-for-16 reverse stock split. [2] Less than $1.

v3.23.3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows provided by (used in) operating activities:
Net income (loss)	$ 42	$ (555)
Depreciation and amortization	115	83
Impairment of inventory	9	31
Impairment of software		51
Non-cash lease expense	96	93
Stock-based compensation	46	69
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable	14	(41)
Increase in inventory	(129)	(317)
Decrease (increase) in deferred COGS	162	(158)
Increase in other current assets and other assets	(49)	(62)
Increase (decrease) in accounts payable and accrued expenses	157	(91)
Increase in deferred revenue	40	660
Decrease in operating lease liability	(104)	(97)
(Decrease) increase in other current liabilities and non-current liabilities	(33)	23
Net cash provided by (used in) operating activities	366	(311)
Cash flows used in investing activities:
Investments in technology	(70)	(286)
Other capital investments	(2)	(6)
Net cash used in investing activities	(72)	(292)
Cash flows provided by financing activities:
Stock option exercise proceeds		5
Warrant exercise proceeds	5
Net cash provided by financing activities	5	5
Net increase (decrease) in cash	299	(598)
Cash at the beginning of the year	1,450	1,722
Cash at the end of the period	1,749	1,124
Cash paid during the period for:
Interest	2	1
Non-cash investing and financing activities:
Accrued preferred dividends to former CEO of OmniMetrix	$ 3	$ 3

v3.23.3

BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	NOTE 1— BASIS OF PRESENTATION   The accompanying unaudited condensed consolidated financial statements of Acorn Energy, Inc. (“Acorn”) and its subsidiaries, OmniMetrix, LLC (“OmniMetrix”) and OMX Holdings, Inc. (collectively, with Acorn and OmniMetrix, “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine- and three-month periods ended September 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. All dollar amounts are rounded to the nearest thousand and, thus, are approximate.   These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 16, 2023.   Reverse Stock Split   On September 5, 2023, the Board of Directors of Acorn approved a Certificate of Amendment to Acorn’s Restated Certificate of Incorporation (the “Certificate of Amendment”) that provided for a 1-for-16 reverse stock split of Acorn’s Common Stock (the “Reverse Stock Split”). Acorn filed the Certificate of Amendment with the Secretary of State of the State of Delaware on September 6, 2023, and the Reverse Stock Split became effective at 5:00 p.m. EDT on September 7, 2023. At the effective time of the Reverse Stock Split, every sixteen issued and outstanding shares of Acorn’s Common Stock were automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. Stockholders who would have otherwise been entitled to fractional shares of Common Stock, as a result of the Reverse Stock Split, received a cash payment in lieu of receiving fractional shares. The value of the fractional shares repurchased was $347 and equated to fifty-eight shares. All share and per share amounts of common stock, options and warrants contained in this Quarterly Report on Form 10-Q and the accompanying unaudited condensed consolidated financial statements and related footnotes have been restated for all periods to give retroactive effect to the Reverse Stock Split and the related fractional share repurchase for all prior periods presented. Accordingly, the unaudited Condensed Consolidated Statement of Stockholders’ Deficit reflects the impact of the Reverse Stock Split by reclassifying from “Common Stock” to “Additional paid in capital” an amount equal to the aggregate par value of the number of shares by which the total number of shares outstanding decreased as a result of the Reverse Stock Split.

v3.23.3

ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
ACCOUNTING POLICIES	NOTE 2—ACCOUNTING POLICIES   Use of Estimates in Preparation of Financial Statements   The preparation of unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.   As applicable to these unaudited condensed consolidated financial statements, the most significant estimates and assumptions relate to uncertainties with respect to revenue recognition and management’s projections related to the going concern analysis.     Concentrations of Credit Risk   Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and trade accounts receivable. The Company’s cash was deposited with a U.S. bank and amounted to $1,749,000 at September 30, 2023. The Company does not believe there is a significant risk of non-performance by its counterparties. For the three-month period ended September 30, 2023, there were no customers that represented greater than 10% of the Company’s total invoiced sales. For the nine-month period ended September 30, 2023, there was one customer that represented 11% of the Company’s total invoiced sales. At September 30, 2023, the Company did not have any customers that represented greater than 10% of our total accounts receivable. Approximately 12% of the accounts receivable at December 31, 2022 was due from one customer which was subsequently collected in full. Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising the Company’s customer base. Although we do not believe there is significant risk of non-performance by these counterparties, any failures or defaults on their part could negatively impact the value of our financial instruments and could have a material adverse effect on our business, operations or financial condition.   Inventory   Inventories are comprised of components (raw materials), work-in-process and finished goods, which are measured at the lower of cost or net realizable value.   Raw materials inventory is generally comprised of radios, cables, antennas, and electrical components. Finished goods inventory consists of fully assembled systems ready for final shipment to the customer. Costs are determined at cost of acquisition on a weighted average basis and include all outside production and applicable shipping costs.   All inventories are periodically reviewed to identify slow-moving and obsolete inventory. Management conducted an assessment and wrote-off inventory carried at $9,000 for the nine months ended September 30, 2023, of which $1,000 was written off in the three months ended September 30, 2023.   Revenue Recognition   On September 1, 2023, OmniMetrix launched an updated version of its products that includes new functionality in its TrueGuard, AIRGuard, Patriot and Hero products that allows its customers to have options as it relates to obtaining and utilizing the data that is provided by its hardware devices. This new functionality allows for SIM card options, configuration options regarding IP address endpoints and DNS routes, and access to OmniMetrix’s over-the-air data protocol. This product update allows customers to have the option to purchase OmniMetrix’s monitoring service, monitor the products themselves if they have the ability in-house, or choose another monitoring provider if they so desire. OmniMetrix’s prior hardware product version could not function as a distinct product from its monitoring services. This new version’s functionality results in OmniMetrix’s hardware and monitoring services being capable of being two distinct products and services. OmniMetrix recognizes revenue, COGS and commissions from the sale of the new version of its hardware products sold when the product is shipped rather than over the estimated time that the unit is in service for the customer. Monitoring revenue continues to be deferred and amortized over the period that the monitoring services are rendered. The remaining balance of deferred revenue from the prior version of these products will continue to be amortized each period until it is fully amortized. The modification to the circuit boards and embedded firmware of hardware enclosures in inventory as of August 31, 2023 were made such that only the new version of these products was sold subsequent to this date.   Basic and Diluted Net Income (Loss) Per Share   Basic net income (loss) per share is computed by dividing the net income (loss) attributable to Acorn Energy, Inc. by the weighted average number of shares outstanding during the period, excluding treasury stock. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares outstanding plus the dilutive potential of common shares which would result from the exercise of stock options. The dilutive effects of stock options are excluded from the computation of diluted net income (loss) per share if doing so would be antidilutive. For the nine-month period ending September 30, 2023, the weighted average number of options that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 6,000 (which have a weighted average exercise price of $8.49). For the three-month period ending September 30, 2023, there were no options that were excluded from the computation of diluted net loss due to having an antidilutive effect. For both the nine- and three-month periods ending September 30, 2022, the number of options that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 60,000 (which have a weighted average exercise price of $6.72) and the number of warrants that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 2,187 (which had a weighted average exercise price of $2.08).     The following data represents the amounts used in computing EPS and the effect on net income (loss) and the weighted average number of shares of dilutive potential common stock (in thousands):  SCHEDULE OF EFFECT ON NET INCOME LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES     2023     2022     2023     2022       Nine months ended September 30,     Three months ended September 30,       2023     2022     2023     2022   Net income (loss) available to common stockholders   $ 35     $ (556 )   $ 24     $ (210 )                                   Weighted average share outstanding:                                 Basic     2,484       2,481       2,485       2,481   Add: Stock options     22       —       47       —   Diluted     2,506       2,481       2,532       2,481                                     Basic and diluted net income (loss) per share   $ 0.01     $ (0.22 )   $ 0.01     $ (0.08 )   Recently Adopted Accounting Standards   Other than the pronouncement noted below, there have been no recent accounting pronouncements or changes in accounting standards during the nine-month period ended September 30, 2023 that would affect the Company’s condensed consolidated financial statements.   On January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance was issued to provide financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Specifically, this guidance requires entities to utilize a new “expected loss” model as it relates to trade and other receivables. The adoption of the standard impacts the way the Company estimates the allowance for doubtful accounts on its trade and other receivables. Refer to Note 4, “Allowance for Credit Losses,” for further information regarding the Company’s allowance for expected credit losses.

v3.23.3

LIQUIDITY	9 Months Ended
	Sep. 30, 2023
Liquidity
LIQUIDITY	NOTE 3—LIQUIDITY   As of September 30, 2023, the Company had cash of $1,749,000.   At September 30, 2023, the Company had negative working capital of $513,000. The Company’s working capital includes $1,749,000 of cash and deferred revenue of $4,270,000. Such deferred revenue does not require a significant cash outlay for the revenue to be recognized. Net cash increased during the nine months ended September 30, 2023 by $299,000, of which $366,000 was provided by operating activities, $72,000 was used in investing activities and $5,000 was provided by financing activities.   As of November 7, 2023, the Company had cash of $1,684,000. The Company believes that such cash, plus the cash generated from operations, will provide sufficient liquidity to finance the operating activities of the Company at its current level of operations for the twelve months from the issuance of these unaudited condensed consolidated financial statements. The Company may, at some point, elect to obtain a new line of credit or other source of financing to fund additional investments in the business.

v3.23.3

ALLOWANCE FOR CREDIT LOSSES	9 Months Ended
	Sep. 30, 2023
Receivables [Abstract]
ALLOWANCE FOR CREDIT LOSSES	NOTE 4—ALLOWANCE FOR CREDIT LOSSES   For the Company, ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” applies to its contract assets (deferred COGS and deferred sales commissions), lease receivables (sublease, see Note 6) and trade receivables. There are no expected or estimated credit losses on the Company’s contract assets or its lease receivable based on the Company’s implementation of ASU 2016-13.   The Company’s trade receivables primarily arise from the sale of our products to independent residential dealers, industrial distributors and dealers, national and regional retailers, equipment distributors, and certain end users with payment terms generally ranging from 30 to 60 days. The Company evaluates the credit risk of a customer when extending credit based on a combination of various financial and qualitative factors that may affect the customer’s ability to pay. These factors include the customer’s financial condition and past payment experience.   The Company maintains an allowance for credit losses, which represents an estimate of expected losses over the remaining contractual life of its receivables considering current market conditions and estimates for supportable forecasts when appropriate. The Company measures expected credit losses on its trade receivables on an entity-by-entity basis. The estimate of expected credit losses considers a historical loss experience rate that is adjusted for delinquency trends, collection experience, and/or economic risk where appropriate. Additionally, management develops a specific allowance for trade receivables known to have a high risk of expected future credit loss.   The Company has historically experienced immaterial write-offs given the nature of the customers that receive credit. As of September 30, 2023, the Company had gross receivables of $590,000 and an allowance for credit losses of $7,000.   The following is a tabular reconciliation of the Company’s allowance for credit losses:  SCHEDULE OF ALLOWANCES FOR CREDIT LOSSES     September 30, 2023     December 31, 2022       As of       September 30, 2023     December 31, 2022       (in thousands)   Balance at beginning of period   $ 10     $ 6   Provision for credit losses     3       3   Net (charge-offs) credits     (6 )     1   Balance at end of period   $ 7     $ 10

v3.23.3

INVENTORY	9 Months Ended
	Sep. 30, 2023
Inventory Disclosure [Abstract]
INVENTORY	NOTE 5—INVENTORY  SCHEDULE OF INVENTORY     September 30, 2023     December 31, 2022       As of       September 30, 2023     December 31, 2022       (in thousands)   Raw materials   $ 859     $ 684   Finished goods     50       105   Inventory net    $ 909     $ 789     At September 30, 2023 and December 31, 2022, the Company’s inventory reserve was $9,000 and $4,000, respectively.   All inventories are periodically reviewed to identify slow-moving and obsolete inventory. Management conducted an assessment and wrote-off inventory carried at $9,000 for the nine months ended September 30, 2023, of which $1,000 was written off in the three months ended September 30, 2023.

v3.23.3

LEASES	9 Months Ended
	Sep. 30, 2023
Leases
LEASES	NOTE 6—LEASES   OmniMetrix leases office space and office equipment under operating lease agreements. The office lease has an expiration date of September 30, 2025. The office equipment lease was entered into in April 2019 and has a sixty-month term. Operating lease payments for the nine months ended September 30, 2023 and 2022 were $96,000 and $93,000, respectively. Operating lease payments for the three months ended September 30, 2023 and 2022 were $33,000 and $31,000, respectively. The future minimum lease payments on non-cancellable operating leases as of September 30, 2023 using a discount rate of 4.5% are $250,000. The 4.5% discount rate used is the incremental borrowing rate which, as defined in ASC 842, is the rate of interest that a lessee would have to pay to borrow, on a collateralized basis, over a similar term and in a similar economic environment, an amount equal to the lease payments.   Supplemental cash flow information related to leases consisted of the following (in thousands):  SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES     For the Nine Months Ending September 30,       2023     2022   Cash paid for operating lease liabilities   $ 96     $ 93                       Supplemental balance sheet information related to leases consisted of the following:  SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES       2023   Weighted average remaining lease terms for operating leases     1.99 years               The table below reconciles the undiscounted future minimum lease payments under non-cancelable lease agreements having initial terms of more than one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of September 30, 2023 (in thousands):  SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS     Year ended September 30,   2024   $ 129   2025     132   Total undiscounted cash flows     261   Less: Imputed interest     (11 ) Present value of operating lease liabilities (a)   $ 250       (a) Includes current portion of $121,000 for operating leases.   On July 6, 2021, the Company entered into an agreement with King Industrial Realty, Inc., to sublease from the Company 1,900 square feet of office space of the Company’s 21,000 square feet of office and production space in the Hamilton Mill Business Park located in Buford, Georgia, for a monthly sublease payment of $2,375 (plus an annual escalator each year of 3%) which includes the base rent plus a pro-rata share of utilities, property taxes and insurance. Fifty percent of any excess rent received above the per square foot amount that the Company pays will be remitted to the Company’s landlord less the allocation of any shared expenses and leasehold improvements specific to the sublease. The estimated amount the Company expects to remit to the landlord each future year of the sublease is $6,100 per year. The sublease commenced on October 1, 2021 and will run through September 30, 2025 which is the end of the Company’s lease term with its landlord. Below are the future payments (in thousands) expected under the sublease net of the estimated annual service cost of $2,220:  SCHEDULE OF SUB LEASES     Year ended September 30,   2024   $ 28   2025     29   Total undiscounted cash flows   $ 57

v3.23.3

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 7—COMMITMENTS AND CONTINGENCIES   The Company has $250,000 in operating lease obligations payable through 2025 and $15,000 in other contractual obligations. The Company also had $603,000 in open purchase order commitments payable through October 2023.

v3.23.3

EQUITY	9 Months Ended
	Sep. 30, 2023
Equity [Abstract]
EQUITY	NOTE 8—EQUITY   (a) General   Reverse Stock Split   On September 5, 2023, the Board of Directors of Acorn approved a Certificate of Amendment to Acorn’s Restated Certificate of Incorporation that provided for a 1-for-16 reverse stock split of Acorn’s Common Stock. See Note 1 for related details. At September 30, 2023, Acorn had issued and outstanding 2,484,791 shares of its common stock, par value $0.01 per share. Holders of outstanding common stock are entitled to receive dividends when and if declared by the Board and to share ratably in the assets of the Company legally available for distribution in the event of a liquidation, dissolution or winding up of the Company.   The Company is not authorized to issue preferred stock. Accordingly, no preferred stock is issued or outstanding.   (b) Summary Employee Option Information   The Company’s stock option plans provide for the grant to officers, directors and employees of options to purchase shares of common stock. The purchase price may be paid in cash or, if the option is “in-the-money” at the end of the option term, it is automatically exercised “net”. In a net exercise of an option, the Company does not require a payment of the exercise price of the option from the optionee but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Each option is exercisable for one share of the Company’s common stock. Most options expire within five to ten years from the date of the grant, and generally vest over a three-year period from the date of the grant.   At September 30, 2023, 77,540 options were available for grant under the Amended and Restated 2006 Stock Incentive Plan and no options were available for grant under the 2006 Stock Option Plan for Non-Employee Directors. During the nine months ended September 30, 2023, 13,436 options were issued. No options were issued in the three months ended September 30, 2023. The options were issued as follows: an aggregate of 3,437 to directors (excluding the CEO), 2,187 to the CEO, 6,250 to the CFO and an aggregate of 1,562 to employees. In the nine and three months ended September 30, 2023, there were no grants to non-employees (other than the directors, CEO and CFO).   No options were exercised in the nine and three months ended September 30, 2023. The intrinsic value of options outstanding and of options exercisable at September 30, 2023 was $38,000. The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the respective years (all in weighted averages):  SCHEDULE OF BLACK-SCHOLES OPTION PRICING ESTIMATE FAIR VALUE     Number of Options (in shares)     Weighted Average Exercise Price Per Share     Weighted Average Remaining Contractual Life     Aggregate Intrinsic Value   Outstanding at December 31, 2022     58,966     $ 6.71       4.3 years     $ 16,000   Granted     13,436       5.24                   Exercised     —       —                   Forfeited or expired     (1,280 )     6.48                   Outstanding at September 30, 2023     71,122     $ 6.44       4.2 years     $ 46,000   Exercisable at September 30, 2023     61,786     $ 6.49       3.9 years     $ 38,000       The fair value of the options granted of $46,000 was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions: SCHEDULE OF STOCK OPTIONS FAIR VALUE ASSUMPTIONS ESTIMATED USING BLACK-SCHOLES  Risk-free interest rate     3.9 % Expected term of options     4.1 years   Expected annual volatility     94.5 % Expected dividend yield     — %   (c) Stock-based Compensation Expense   Stock-based compensation expense included in SG&A expenses in the Company’s unaudited condensed consolidated statements of operations was $46,000 and $69,000 for the nine-month periods ended September 30, 2023 and 2022, respectively, and $16,000 and $16,000 for the three-month periods ended September 30, 2023 and 2022, respectively.   The total compensation cost related to non-vested awards not yet recognized was $17,000 and $43,000 as of September 30, 2023 and 2022, respectively.   (d) Warrants   The Company previously issued warrants at exercise prices equal to or greater than the market value of the Company’s common stock at the date of issuance. A summary of warrant activity follows:  SUMMARY OF WARRANT ACTIVITY     Number of Warrants (in shares)     Weighted Average Exercise Price Per Share     Weighted Average Remaining Contractual Life   Outstanding at December 31, 2022     2,187     $ 2.08       2.5 months   Granted     —       —           Exercised     (2,187 )     2.08           Forfeited or expired     —       —           Outstanding at September 30, 2023     —     $ —       —

v3.23.3

SEGMENT REPORTING	9 Months Ended
	Sep. 30, 2023
Segment Reporting [Abstract]
SEGMENT REPORTING	NOTE 9— SEGMENT REPORTING   As of September 30, 2023, the Company operates in two reportable operating segments, both of which are performed through the Company’s OmniMetrix subsidiary:     ● Power Generation (“PG”). OmniMetrix’s PG services provide wireless remote monitoring and control systems and IoT applications for residential and commercial/industrial power generation equipment. This includes OmniMetrix’s AIRGuard product, which remotely monitors and controls industrial air compressors, and its Smart Annunciator product, which is typically sold to commercial customers that require a visual representation of the generator’s status and has a touchscreen display that indicates the current state of that generator.         ● Cathodic Protection (“CP”). OmniMetrix’s CP services provide remote monitoring and control products for cathodic protection systems on oil and gas pipelines serving the gas utilities market and pipeline operators. The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. OmniMetrix also offers the industry’s first RADTM (Remote AC Mitigation Disconnect) that mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools, which can drastically reduce a company’s expense while increasing employee safety.     The Company’s reportable segments are strategic business units, offering different products and services, and are managed separately as each business requires different technology and marketing strategies.   The following tables represent segmented data for the nine-month and three-month periods ended September 30, 2023 and 2022 (in thousands):  SUMMARY OF SEGMENTED DATA     PG     CP     Total   Nine months ended September 30, 2023:                         Revenues from external customers   $ 4,994     $ 815     $ 5,809   Segment gross profit     3,876       480       4,356   Depreciation and amortization     99       16       115   Segment income (loss) before income taxes   $ 891     $ (35 )   $ 856                             Nine months ended September 30, 2022:                         Revenues from external customers   $ 4,335     $ 820     $ 5,155   Segment gross profit     3,256       463       3,719   Depreciation and amortization     72       13       85   Segment income (loss) before income taxes*   $ 340     $ (103 )   $ 237                             Three months ended September 30, 2023:                         Revenues from external customers   $ 1,798     $ 289     $ 2,087   Segment gross profit     1,381       169       1,550   Depreciation and amortization     36       5       41   Segment income before income taxes   $ 361     $ 5     $ 366                             Three months ended September 30, 2022:                         Revenues from external customers   $ 1,510     $ 273     $ 1,783   Segment gross profit     1,092       123       1,215   Depreciation and amortization     31       5       36   Segment income (loss) before income taxes   $ 78     $ (58 )   $ 20     * Software impairment of $51,000 is not related to a specific segment and, thus, is not included in the “Total net income before income taxes for reportable segments” for the nine months ended September 30, 2022   The Company does not currently break out total assets by reportable segment as there is a high level of shared utilization between the segments. Further, the Chief Decision Maker does not review the assets by segment.   Reconciliation of Segment Income (Loss) to Consolidated Net Income (Loss) Before Income Taxes  SCHEDULE OF RECONCILIATION OF SEGMENT DATA TO CONSOLIDATED STATEMENT OF OPERATIONS     2023     2022     2023     2022       Nine months ended September 30,     Three months ended September 30,       2023     2022     2023     2022   Total net income before income taxes for reportable segments   $ 856     $ 237     $ 366     $ 20   Unallocated software impairment             (51 )                 Unallocated cost of corporate headquarters     (814 )     (741 )     (339 )     (230 ) Consolidated net income (loss) before income taxes   $ 42     $ (555 )   $ 27     $ (210 )

v3.23.3

REVENUE	9 Months Ended
	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
REVENUE	NOTE 10—REVENUE   The following table disaggregates the Company’s revenue for the nine-month and three-month periods ended September 30, 2023 and 2022 (in thousands):  SCHEDULE OF DISAGGREGATES OF REVENUE     Hardware     Monitoring     Total   Nine months ended September 30, 2023:                         PG Segment   $ 2,017     $ 2,977     $ 4,994   CP Segment     620       195       815   Total Revenue   $ 2,637     $ 3,172     $ 5,809         Hardware     Monitoring     Total   Nine months ended September 30, 2022:                         PG Segment   $ 1,610     $ 2,725     $ 4,335   CP Segment     631       189       820   Total Revenue   $ 2,241     $ 2,914     $ 5,155         Hardware     Monitoring     Total   Three months ended September 30, 2023:                         PG Segment   $ 780     $ 1,018     $ 1,798   CP Segment     224       65       289   Total Revenue   $ 1,004     $ 1,083     $ 2,087         Hardware     Monitoring     Total   Three months ended September 30, 2022:                         PG Segment   $ 608     $ 902     $ 1,510   CP Segment     217       56       273   Total Revenue   $ 825     $ 958     $ 1,783     Deferred revenue activity for the nine months ended September 30, 2023 can be seen in the table below (in thousands): SCHEDULE OF DEFERRED REVENUE ACTIVITY      Hardware     Monitoring     Total   Balance at December 31, 2022   $ 3,751     $ 2,420     $ 6,171   Additions during the period     1,597       3,436       5,033   Recognized as revenue     (1,821 )     (3,172 )     (4,993 ) Balance at September 30, 2023   $ 3,527     $ 2,684     $ 6,211                             Amounts to be recognized as revenue in the twelve-month-period ending:                         September 30, 2024   $ 2,023      $ 2,247     $ 4,270   September 30, 2025     1,179       433       1,612   September 30, 2026 and thereafter     325       4       329       $ 3,527      $ 2,684      $ 6,211       The amount of hardware revenue recognized during the nine months ended September 30, 2023 that was included in deferred revenue at the beginning of the fiscal year was $1,469,000. The amount of monitoring revenue during the nine months ended September 30, 2023 that was included in deferred revenue at the beginning of the fiscal year was $1,890,000.  SCHEDULE OF RECONCILIATION OF HARDWARE REVENUE Reconciliation of Hardware Revenue   2023     2022     2023     2022       Nine months ended September 30,     Three months ended September 30,   Reconciliation of Hardware Revenue   2023     2022     2023     2022   Amortization of deferred revenue   $ 1,821     $ 1,658     $ 629     $ 631   Sales of custom designed units and related accessories     135       —       43       —   Hardware sales (new product versions)     150       —       150       —   Other accessories, services, shipping and miscellaneous charges     531       583       182       194   Total hardware revenue   $ 2,637     $ 2,241     $ 1,004     $ 825     Deferred charges relate only to the sale of equipment. Deferred charges activity for the nine months ended September 30, 2023 can be seen in the table below (in thousands):  SCHEDULE OF DEFERRED CHARGES ACTIVITY           Balance at December 31, 2022   $ 1,694   Additions, net of adjustments, during the period     655   Recognized as COGS     (817 ) Balance at September 30, 2023   $ 1,532             Amounts to be recognized as COGS in the twelve-month-period ending:         September 30, 2024   $ 890   September 30, 2025     507   September 30, 2026 and thereafter     135       $ 1,532     SCHEDULE OF RECONCILIATION OF COGS EXPENSE  Reconciliation of COGS Expense   2023     2022     2023     2022       Nine months ended September 30,     Three months ended September 30,   Reconciliation of COGS Expense   2023     2022     2023     2022   Amortization of deferred COGS   $ 817     $ 793     $ 277     $ 309   COGS of custom designed units and related accessories     34       —       11       —   COGS of hardware sales (new product versions)     66       —       66       —   Data costs for monitoring     224       250       76       93   Other COGS of accessories, services, shipping and miscellaneous charges     312       393       107       166   Total COGS expense   $ 1,453     $ 1,436     $ 537     $ 568     The following table provides a reconciliation of the Company’s sales commissions contract assets for the nine-month period ended September 30, 2023 (in thousands):  SCHEDULE OF SALES COMMISSIONS CONTRACT ASSETS     Hardware     Monitoring     Total   Balance at December 31, 2022   $ 319     $ 80     $ 399   Additions during the period     148       43       191   Amortization of sales commissions     (149 )     (27 )     (176 ) Balance at September 30, 2023   $ 318       96       414     The capitalized sales commissions are included in other current assets ($218,000) and other assets ($196,000) in the Company’s unaudited condensed consolidated balance sheets as of September 30, 2023. The capitalized sales commissions are included in other current assets ($196,000) and other assets ($203,000) in the Company’s condensed consolidated balance sheet at December 31, 2022.   Amounts to be recognized as sales commission expense in the twelve-month-period ending:  SCHEDULE OF SALES COMMISSIONS EXPENSE           September 30, 2024   $ 218   September 30, 2025     138   September 30, 2026 and thereafter     58   Total   $ 414       The contract assets of deferred COGS and deferred sales commissions are subject to review under ASU 2016-13, see Notes 2 and 4; however, no credit losses on contract assets are expected based on the Company’s implementation of ASU 2016-13.   Commissions earned from the sales of the new hardware products will be recognized when the product is shipped.

v3.23.3

RELATED PARTY BALANCES AND TRANSACTIONS	9 Months Ended
	Sep. 30, 2023
Related Party Transactions [Abstract]
RELATED PARTY BALANCES AND TRANSACTIONS	NOTE 11—RELATED PARTY BALANCES AND TRANSACTIONS   Officer and Director Fees   The Company recorded fees to officers of $391,000 and $391,000 for the nine months ended September 30, 2023 and 2022, respectively, and $131,000 and $130,000 for the three months ended September 30, 2023 and 2022, respectively, which are included in SG&A expenses.   The Company recorded fees to directors of $52,000 and $44,000 for the nine months ended September 30, 2023 and 2022, respectively, and $18,000 and $15,000 for the three months ended September 30, 2023 and 2022, respectively, which are included in SG&A expenses. Intercompany   The intercompany balance due to Acorn from OmniMetrix for amounts loaned, accrued interest and expenses paid by Acorn on OmniMetrix’s behalf was $2,928,000 as of September 30, 2023 as compared to $3,677,000 as of December 31, 2022. During the nine months ended September 30, 2023, the intercompany amount due to Acorn from OmniMetrix decreased by $749,000. This included repayments of $961,000 offset by interest of $134,000 and dividends of $57,000 due to Acorn and $21,000 in shared expenses paid by Acorn. During the nine months ended September 30, 2022, the intercompany amount due to Acorn from OmniMetrix decreased by $447,000. This included repayments of $780,000 offset by interest of $134,000, dividends of $57,000 due to Acorn and $142,000 in shared expenses paid by Acorn. The intercompany balances are eliminated in consolidation.

v3.23.3

ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Use of Estimates in Preparation of Financial Statements	Use of Estimates in Preparation of Financial Statements   The preparation of unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.   As applicable to these unaudited condensed consolidated financial statements, the most significant estimates and assumptions relate to uncertainties with respect to revenue recognition and management’s projections related to the going concern analysis.
Concentrations of Credit Risk	Concentrations of Credit Risk   Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and trade accounts receivable. The Company’s cash was deposited with a U.S. bank and amounted to $1,749,000 at September 30, 2023. The Company does not believe there is a significant risk of non-performance by its counterparties. For the three-month period ended September 30, 2023, there were no customers that represented greater than 10% of the Company’s total invoiced sales. For the nine-month period ended September 30, 2023, there was one customer that represented 11% of the Company’s total invoiced sales. At September 30, 2023, the Company did not have any customers that represented greater than 10% of our total accounts receivable. Approximately 12% of the accounts receivable at December 31, 2022 was due from one customer which was subsequently collected in full. Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising the Company’s customer base. Although we do not believe there is significant risk of non-performance by these counterparties, any failures or defaults on their part could negatively impact the value of our financial instruments and could have a material adverse effect on our business, operations or financial condition.
Inventory	Inventory   Inventories are comprised of components (raw materials), work-in-process and finished goods, which are measured at the lower of cost or net realizable value.   Raw materials inventory is generally comprised of radios, cables, antennas, and electrical components. Finished goods inventory consists of fully assembled systems ready for final shipment to the customer. Costs are determined at cost of acquisition on a weighted average basis and include all outside production and applicable shipping costs.   All inventories are periodically reviewed to identify slow-moving and obsolete inventory. Management conducted an assessment and wrote-off inventory carried at $9,000 for the nine months ended September 30, 2023, of which $1,000 was written off in the three months ended September 30, 2023.
Revenue Recognition	Revenue Recognition   On September 1, 2023, OmniMetrix launched an updated version of its products that includes new functionality in its TrueGuard, AIRGuard, Patriot and Hero products that allows its customers to have options as it relates to obtaining and utilizing the data that is provided by its hardware devices. This new functionality allows for SIM card options, configuration options regarding IP address endpoints and DNS routes, and access to OmniMetrix’s over-the-air data protocol. This product update allows customers to have the option to purchase OmniMetrix’s monitoring service, monitor the products themselves if they have the ability in-house, or choose another monitoring provider if they so desire. OmniMetrix’s prior hardware product version could not function as a distinct product from its monitoring services. This new version’s functionality results in OmniMetrix’s hardware and monitoring services being capable of being two distinct products and services. OmniMetrix recognizes revenue, COGS and commissions from the sale of the new version of its hardware products sold when the product is shipped rather than over the estimated time that the unit is in service for the customer. Monitoring revenue continues to be deferred and amortized over the period that the monitoring services are rendered. The remaining balance of deferred revenue from the prior version of these products will continue to be amortized each period until it is fully amortized. The modification to the circuit boards and embedded firmware of hardware enclosures in inventory as of August 31, 2023 were made such that only the new version of these products was sold subsequent to this date.
Basic and Diluted Net Income (Loss) Per Share	Basic and Diluted Net Income (Loss) Per Share   Basic net income (loss) per share is computed by dividing the net income (loss) attributable to Acorn Energy, Inc. by the weighted average number of shares outstanding during the period, excluding treasury stock. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares outstanding plus the dilutive potential of common shares which would result from the exercise of stock options. The dilutive effects of stock options are excluded from the computation of diluted net income (loss) per share if doing so would be antidilutive. For the nine-month period ending September 30, 2023, the weighted average number of options that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 6,000 (which have a weighted average exercise price of $8.49). For the three-month period ending September 30, 2023, there were no options that were excluded from the computation of diluted net loss due to having an antidilutive effect. For both the nine- and three-month periods ending September 30, 2022, the number of options that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 60,000 (which have a weighted average exercise price of $6.72) and the number of warrants that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 2,187 (which had a weighted average exercise price of $2.08).     The following data represents the amounts used in computing EPS and the effect on net income (loss) and the weighted average number of shares of dilutive potential common stock (in thousands):  SCHEDULE OF EFFECT ON NET INCOME LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES     2023     2022     2023     2022       Nine months ended September 30,     Three months ended September 30,       2023     2022     2023     2022   Net income (loss) available to common stockholders   $ 35     $ (556 )   $ 24     $ (210 )                                   Weighted average share outstanding:                                 Basic     2,484       2,481       2,485       2,481   Add: Stock options     22       —       47       —   Diluted     2,506       2,481       2,532       2,481                                     Basic and diluted net income (loss) per share   $ 0.01     $ (0.22 )   $ 0.01     $ (0.08 )
Recently Adopted Accounting Standards	Recently Adopted Accounting Standards   Other than the pronouncement noted below, there have been no recent accounting pronouncements or changes in accounting standards during the nine-month period ended September 30, 2023 that would affect the Company’s condensed consolidated financial statements.   On January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance was issued to provide financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Specifically, this guidance requires entities to utilize a new “expected loss” model as it relates to trade and other receivables. The adoption of the standard impacts the way the Company estimates the allowance for doubtful accounts on its trade and other receivables. Refer to Note 4, “Allowance for Credit Losses,” for further information regarding the Company’s allowance for expected credit losses.

v3.23.3

ACCOUNTING POLICIES (Tables)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
SCHEDULE OF EFFECT ON NET INCOME LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES	The following data represents the amounts used in computing EPS and the effect on net income (loss) and the weighted average number of shares of dilutive potential common stock (in thousands):  SCHEDULE OF EFFECT ON NET INCOME LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES     2023     2022     2023     2022       Nine months ended September 30,     Three months ended September 30,       2023     2022     2023     2022   Net income (loss) available to common stockholders   $ 35     $ (556 )   $ 24     $ (210 )                                   Weighted average share outstanding:                                 Basic     2,484       2,481       2,485       2,481   Add: Stock options     22       —       47       —   Diluted     2,506       2,481       2,532       2,481                                     Basic and diluted net income (loss) per share   $ 0.01     $ (0.22 )   $ 0.01     $ (0.08 )

v3.23.3

ALLOWANCE FOR CREDIT LOSSES (Tables)	9 Months Ended
	Sep. 30, 2023
Receivables [Abstract]
SCHEDULE OF ALLOWANCES FOR CREDIT LOSSES	The following is a tabular reconciliation of the Company’s allowance for credit losses:  SCHEDULE OF ALLOWANCES FOR CREDIT LOSSES     September 30, 2023     December 31, 2022       As of       September 30, 2023     December 31, 2022       (in thousands)   Balance at beginning of period   $ 10     $ 6   Provision for credit losses     3       3   Net (charge-offs) credits     (6 )     1   Balance at end of period   $ 7     $ 10

v3.23.3

INVENTORY (Tables)	9 Months Ended
	Sep. 30, 2023
Inventory Disclosure [Abstract]
SCHEDULE OF INVENTORY	SCHEDULE OF INVENTORY     September 30, 2023     December 31, 2022       As of       September 30, 2023     December 31, 2022       (in thousands)   Raw materials   $ 859     $ 684   Finished goods     50       105   Inventory net    $ 909     $ 789

v3.23.3

LEASES (Tables)	9 Months Ended
	Sep. 30, 2023
Leases
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES	Supplemental cash flow information related to leases consisted of the following (in thousands):  SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES     For the Nine Months Ending September 30,       2023     2022   Cash paid for operating lease liabilities   $ 96     $ 93
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES	Supplemental balance sheet information related to leases consisted of the following:  SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES       2023   Weighted average remaining lease terms for operating leases     1.99 years
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS	The table below reconciles the undiscounted future minimum lease payments under non-cancelable lease agreements having initial terms of more than one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of September 30, 2023 (in thousands):  SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS     Year ended September 30,   2024   $ 129   2025     132   Total undiscounted cash flows     261   Less: Imputed interest     (11 ) Present value of operating lease liabilities (a)   $ 250       (a) Includes current portion of $121,000 for operating leases.
SCHEDULE OF SUB LEASES	SCHEDULE OF SUB LEASES     Year ended September 30,   2024   $ 28   2025     29   Total undiscounted cash flows   $ 57

v3.23.3

EQUITY (Tables)	9 Months Ended
	Sep. 30, 2023
Equity [Abstract]
SCHEDULE OF BLACK-SCHOLES OPTION PRICING ESTIMATE FAIR VALUE	SCHEDULE OF BLACK-SCHOLES OPTION PRICING ESTIMATE FAIR VALUE     Number of Options (in shares)     Weighted Average Exercise Price Per Share     Weighted Average Remaining Contractual Life     Aggregate Intrinsic Value   Outstanding at December 31, 2022     58,966     $ 6.71       4.3 years     $ 16,000   Granted     13,436       5.24                   Exercised     —       —                   Forfeited or expired     (1,280 )     6.48                   Outstanding at September 30, 2023     71,122     $ 6.44       4.2 years     $ 46,000   Exercisable at September 30, 2023     61,786     $ 6.49       3.9 years     $ 38,000
SCHEDULE OF STOCK OPTIONS FAIR VALUE ASSUMPTIONS ESTIMATED USING BLACK-SCHOLES	The fair value of the options granted of $46,000 was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions: SCHEDULE OF STOCK OPTIONS FAIR VALUE ASSUMPTIONS ESTIMATED USING BLACK-SCHOLES  Risk-free interest rate     3.9 % Expected term of options     4.1 years   Expected annual volatility     94.5 % Expected dividend yield     — %
SUMMARY OF WARRANT ACTIVITY	The Company previously issued warrants at exercise prices equal to or greater than the market value of the Company’s common stock at the date of issuance. A summary of warrant activity follows:  SUMMARY OF WARRANT ACTIVITY     Number of Warrants (in shares)     Weighted Average Exercise Price Per Share     Weighted Average Remaining Contractual Life   Outstanding at December 31, 2022     2,187     $ 2.08       2.5 months   Granted     —       —           Exercised     (2,187 )     2.08           Forfeited or expired     —       —           Outstanding at September 30, 2023     —     $ —       —

v3.23.3

SEGMENT REPORTING (Tables)	9 Months Ended
	Sep. 30, 2023
Segment Reporting [Abstract]
SUMMARY OF SEGMENTED DATA	The following tables represent segmented data for the nine-month and three-month periods ended September 30, 2023 and 2022 (in thousands):  SUMMARY OF SEGMENTED DATA     PG     CP     Total   Nine months ended September 30, 2023:                         Revenues from external customers   $ 4,994     $ 815     $ 5,809   Segment gross profit     3,876       480       4,356   Depreciation and amortization     99       16       115   Segment income (loss) before income taxes   $ 891     $ (35 )   $ 856                             Nine months ended September 30, 2022:                         Revenues from external customers   $ 4,335     $ 820     $ 5,155   Segment gross profit     3,256       463       3,719   Depreciation and amortization     72       13       85   Segment income (loss) before income taxes*   $ 340     $ (103 )   $ 237                             Three months ended September 30, 2023:                         Revenues from external customers   $ 1,798     $ 289     $ 2,087   Segment gross profit     1,381       169       1,550   Depreciation and amortization     36       5       41   Segment income before income taxes   $ 361     $ 5     $ 366                             Three months ended September 30, 2022:                         Revenues from external customers   $ 1,510     $ 273     $ 1,783   Segment gross profit     1,092       123       1,215   Depreciation and amortization     31       5       36   Segment income (loss) before income taxes   $ 78     $ (58 )   $ 20     * Software impairment of $51,000 is not related to a specific segment and, thus, is not included in the “Total net income before income taxes for reportable segments” for the nine months ended September 30, 2022
SCHEDULE OF RECONCILIATION OF SEGMENT DATA TO CONSOLIDATED STATEMENT OF OPERATIONS	Reconciliation of Segment Income (Loss) to Consolidated Net Income (Loss) Before Income Taxes  SCHEDULE OF RECONCILIATION OF SEGMENT DATA TO CONSOLIDATED STATEMENT OF OPERATIONS     2023     2022     2023     2022       Nine months ended September 30,     Three months ended September 30,       2023     2022     2023     2022   Total net income before income taxes for reportable segments   $ 856     $ 237     $ 366     $ 20   Unallocated software impairment             (51 )                 Unallocated cost of corporate headquarters     (814 )     (741 )     (339 )     (230 ) Consolidated net income (loss) before income taxes   $ 42     $ (555 )   $ 27     $ (210 )

v3.23.3

REVENUE (Tables)	9 Months Ended
	Sep. 30, 2023
Revenue from Contract with Customer [Abstract]
SCHEDULE OF DISAGGREGATES OF REVENUE	The following table disaggregates the Company’s revenue for the nine-month and three-month periods ended September 30, 2023 and 2022 (in thousands):  SCHEDULE OF DISAGGREGATES OF REVENUE     Hardware     Monitoring     Total   Nine months ended September 30, 2023:                         PG Segment   $ 2,017     $ 2,977     $ 4,994   CP Segment     620       195       815   Total Revenue   $ 2,637     $ 3,172     $ 5,809         Hardware     Monitoring     Total   Nine months ended September 30, 2022:                         PG Segment   $ 1,610     $ 2,725     $ 4,335   CP Segment     631       189       820   Total Revenue   $ 2,241     $ 2,914     $ 5,155         Hardware     Monitoring     Total   Three months ended September 30, 2023:                         PG Segment   $ 780     $ 1,018     $ 1,798   CP Segment     224       65       289   Total Revenue   $ 1,004     $ 1,083     $ 2,087         Hardware     Monitoring     Total   Three months ended September 30, 2022:                         PG Segment   $ 608     $ 902     $ 1,510   CP Segment     217       56       273   Total Revenue   $ 825     $ 958     $ 1,783
SCHEDULE OF DEFERRED REVENUE ACTIVITY	Deferred revenue activity for the nine months ended September 30, 2023 can be seen in the table below (in thousands): SCHEDULE OF DEFERRED REVENUE ACTIVITY      Hardware     Monitoring     Total   Balance at December 31, 2022   $ 3,751     $ 2,420     $ 6,171   Additions during the period     1,597       3,436       5,033   Recognized as revenue     (1,821 )     (3,172 )     (4,993 ) Balance at September 30, 2023   $ 3,527     $ 2,684     $ 6,211                             Amounts to be recognized as revenue in the twelve-month-period ending:                         September 30, 2024   $ 2,023      $ 2,247     $ 4,270   September 30, 2025     1,179       433       1,612   September 30, 2026 and thereafter     325       4       329       $ 3,527      $ 2,684      $ 6,211
SCHEDULE OF RECONCILIATION OF HARDWARE REVENUE	SCHEDULE OF RECONCILIATION OF HARDWARE REVENUE Reconciliation of Hardware Revenue   2023     2022     2023     2022       Nine months ended September 30,     Three months ended September 30,   Reconciliation of Hardware Revenue   2023     2022     2023     2022   Amortization of deferred revenue   $ 1,821     $ 1,658     $ 629     $ 631   Sales of custom designed units and related accessories     135       —       43       —   Hardware sales (new product versions)     150       —       150       —   Other accessories, services, shipping and miscellaneous charges     531       583       182       194   Total hardware revenue   $ 2,637     $ 2,241     $ 1,004     $ 825
SCHEDULE OF DEFERRED CHARGES ACTIVITY	Deferred charges relate only to the sale of equipment. Deferred charges activity for the nine months ended September 30, 2023 can be seen in the table below (in thousands):  SCHEDULE OF DEFERRED CHARGES ACTIVITY           Balance at December 31, 2022   $ 1,694   Additions, net of adjustments, during the period     655   Recognized as COGS     (817 ) Balance at September 30, 2023   $ 1,532             Amounts to be recognized as COGS in the twelve-month-period ending:         September 30, 2024   $ 890   September 30, 2025     507   September 30, 2026 and thereafter     135       $ 1,532
SCHEDULE OF RECONCILIATION OF COGS EXPENSE	SCHEDULE OF RECONCILIATION OF COGS EXPENSE  Reconciliation of COGS Expense   2023     2022     2023     2022       Nine months ended September 30,     Three months ended September 30,   Reconciliation of COGS Expense   2023     2022     2023     2022   Amortization of deferred COGS   $ 817     $ 793     $ 277     $ 309   COGS of custom designed units and related accessories     34       —       11       —   COGS of hardware sales (new product versions)     66       —       66       —   Data costs for monitoring     224       250       76       93   Other COGS of accessories, services, shipping and miscellaneous charges     312       393       107       166   Total COGS expense   $ 1,453     $ 1,436     $ 537     $ 568
SCHEDULE OF SALES COMMISSIONS CONTRACT ASSETS	The following table provides a reconciliation of the Company’s sales commissions contract assets for the nine-month period ended September 30, 2023 (in thousands):  SCHEDULE OF SALES COMMISSIONS CONTRACT ASSETS     Hardware     Monitoring     Total   Balance at December 31, 2022   $ 319     $ 80     $ 399   Additions during the period     148       43       191   Amortization of sales commissions     (149 )     (27 )     (176 ) Balance at September 30, 2023   $ 318       96       414
SCHEDULE OF SALES COMMISSIONS EXPENSE	Amounts to be recognized as sales commission expense in the twelve-month-period ending:  SCHEDULE OF SALES COMMISSIONS EXPENSE           September 30, 2024   $ 218   September 30, 2025     138   September 30, 2026 and thereafter     58   Total   $ 414

v3.23.3

BASIS OF PRESENTATION (Details Narrative)	Sep. 05, 2023 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reverse stock split	1-for-16 reverse stock split
Shares repurchased	$ 347

v3.23.3

SCHEDULE OF EFFECT ON NET INCOME LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Accounting Policies [Abstract]
Net income (loss) available to common stockholders		$ 24	$ (210)	$ 35	$ (556)
Weighted average share outstanding:
Basic	[1]	2,485	2,481	2,484	2,481
Add: Stock options		47	0	22	0
Diluted	[1]	2,532	2,481	2,506	2,481
Basic net income (loss) per share	[1]	$ 0.01	$ (0.08)	$ 0.01	$ (0.22)
Diluted net income (loss) per share	[1]	$ 0.01	$ (0.08)	$ 0.01	$ (0.22)
[1] Includes effects of a 1-for-16 reverse stock split.

v3.23.3

ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Product Information [Line Items]
Deposits assets	$ 1,749,000		$ 1,749,000
Inventory write-off	$ 1,000		$ 9,000
Stock Options [Member]
Product Information [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount		2,187	6,000	60,000
Weighted average exercise price		2.08	8.49	6.72
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member]
Product Information [Line Items]
Concentration risk percentage	10.00%		11.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member]
Product Information [Line Items]
Concentration risk percentage					12.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customer [Member]
Product Information [Line Items]
Concentration risk percentage			10.00%

v3.23.3

LIQUIDITY (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Nov. 07, 2023	Dec. 31, 2022
Subsequent Event [Line Items]
Cash	$ 1,749,000
Working capital	513,000
Deferred revenue	4,270,000			$ 3,984,000
Net increase (decrease) in cash	299,000	$ (598,000)
Operating activities	366,000	(311,000)
Investing activities	72,000	292,000
Financing activities	$ 5,000	$ 5,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Cash			$ 1,684,000

v3.23.3

SCHEDULE OF ALLOWANCES FOR CREDIT LOSSES (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Receivables [Abstract]
Balance at beginning of period	$ 10	$ 6
Provision for credit losses	3	3
Net (charge-offs) credits	(6)	1
Balance at end of period	$ 7	$ 10

v3.23.3

ALLOWANCE FOR CREDIT LOSSES (Details Narrative)	Sep. 30, 2023 USD ($)
Receivables [Abstract]
Gross receivables	$ 590,000
Allowances for credit losses	$ 7,000

v3.23.3

SCHEDULE OF INVENTORY (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 859	$ 684
Finished goods	50	105
Inventory net	$ 909	$ 789

v3.23.3

INVENTORY (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Inventory valuation reserves	$ 9,000	$ 9,000	$ 4,000
Inventory write off	$ 1,000	$ 9,000

v3.23.3

SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Leases
Cash paid for operating lease liabilities	$ 96	$ 93

v3.23.3

SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES (Details)	Sep. 30, 2023
Leases
Weighted average remaining lease terms for operating leases	1 year 11 months 26 days

v3.23.3

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Leases
2024	$ 129
2025	132
Total undiscounted cash flows	261
Less: Imputed interest	(11)
Present value of operating lease liabilities	$ 250	[1]
[1] Includes current portion of $121,000 for operating leases.

v3.23.3

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS (Details) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases
Operating leases current portion	$ 121	$ 116

v3.23.3

SCHEDULE OF SUB LEASES (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Leases
2024	$ 28
2025	29
Total undiscounted cash flows	$ 57

v3.23.3

LEASES (Details Narrative)			1 Months Ended	3 Months Ended		9 Months Ended
		Jul. 06, 2021 USD ($) ft²	Apr. 30, 2019	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Operating lease discount rate				4.50%		4.50%
Operating lease payments	[1]			$ 250,000		$ 250,000
Sublease payment		$ 2,375
Estimated sublease payments		6,100
Annual service cost		$ 2,220
King Industrial Reality Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Office and production space | ft²		1,900
King Industrial Realty Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Office and production space | ft²		21,000
Operating Lease Agreements [Member] | Omni Metrix Holdings, Inc. [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Lease description			The office equipment lease was entered into in April 2019 and has a sixty-month term
Operating lease payments				$ 33,000	$ 31,000	$ 96,000	$ 93,000
[1] Includes current portion of $121,000 for operating leases.

v3.23.3

COMMITMENTS AND CONTINGENCIES (Details Narrative)	9 Months Ended
	Sep. 30, 2023 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Operating lease obligations payable	$ 250,000	[1]
Master Services Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Operating lease obligations payable	250,000
Operating leases and contractual services	15,000
Commitment payable	$ 603,000
[1] Includes current portion of $121,000 for operating leases.

v3.23.3

SCHEDULE OF BLACK-SCHOLES OPTION PRICING ESTIMATE FAIR VALUE (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Equity [Abstract]
Number of Options (in shares), Outstanding at beginning of year	58,966
Weighted Average Exercise Price Per Share, Outstanding at beginning of year	$ 6.71
Weighted average remaining contractual life at end	4 years 2 months 12 days	4 years 3 months 18 days
Aggregate intrinsic value at beginning of year	$ 16,000
Number of Options (in shares), Granted	13,436
Weighted Average Exercise Price Per Share, Granted	$ 5.24
Number of Options (in shares), Exercised
Weighted Average Exercise Price Per Share, Exercised
Number of Options (in shares), Forfeited or expired	(1,280)
Weighted Average Exercise Price Per Share, Forfeited or expired	$ 6.48
Number of Options (in shares), Outstanding at end of year	71,122	58,966
Weighted Average Exercise Price Per Share, Outstanding at end of year	$ 6.44	$ 6.71
Aggregate intrinsic value at end of year	$ 46,000	$ 16,000
Number of Options (in shares), Exercisable at end of year	61,786
Weighted Average Exercise Price Per Share, Exercisable at end of year	$ 6.49
Weighted average remaining contractual life at exercisable at end of year	3 years 10 months 24 days
Aggregate intrinsic value, Exercisable at end of year	$ 38,000

v3.23.3

SCHEDULE OF STOCK OPTIONS FAIR VALUE ASSUMPTIONS ESTIMATED USING BLACK-SCHOLES (Details)	9 Months Ended
	Sep. 30, 2023 USD ($)
Equity [Abstract]
Fair value of options granted	$ 46,000
Risk-free interest rate	3.90%
Expected term of options, in years	4 years 1 month 6 days
Expected annual volatility	94.50%
Expected dividend yield

v3.23.3

SUMMARY OF WARRANT ACTIVITY (Details) - Warrant [Member] - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of Warrants (in Shares), Outstanding at beginning balance	2,187
Weighted Average Exercise Price Per Share, Outstanding at beginning balance	$ 2.08
Weighted average remaining contractual life at begining		2 months 15 days
Number of Warrants (in Shares), Granted
Weighted Average Exercise Price Per Share, Granted
Number of Warrants (in Shares), Exercised	(2,187)
Weighted Average Exercise Price Per Share, Exercised	$ 2.08
Number of Warrants (in Shares), Forfeited or expired
Weighted Average Exercise Price Per Share, Forfeited or expired
Number of Warrants (in Shares), Outstanding at end balance		2,187
Weighted Average Exercise Price Per Share, Outstanding at end balance		$ 2.08

v3.23.3

EQUITY (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
	Sep. 05, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stockholders' equity, reverse stock split	1-for-16 reverse stock split
Common stock, shares issued		2,484,791		2,484,791		2,482,604
Common stock, shares outstanding		2,484,791		2,484,791		2,482,604
Common stock, par value		$ 0.01		$ 0.01		$ 0.01
Number of options granted during period				13,436
Intrinsic value of options outstanding		$ 46,000		$ 46,000		$ 16,000
Intrinsic value of options exercisable		38,000		38,000
Compensation cost, non-vested awards not yet recognized		17,000	$ 43,000	17,000	$ 43,000
Selling, General and Administrative Expenses [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock based compensation expense		16,000	$ 16,000	46,000	$ 69,000
Options Held [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Intrinsic value of options outstanding		38,000		38,000
Intrinsic value of options exercisable		$ 38,000		$ 38,000
Share-Based Payment Arrangement, Employee [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options granted during period				1,562
Share-Based Payment Arrangement, Nonemployee [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options granted during period		0		0
Non-Employee Directors [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options granted during period		0		13,436
Director [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options granted during period				3,437
Chief Executive Officer [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options granted during period				2,187
Chief Financial Officer [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options granted during period				6,250
Amended and Restated 2006 Stock Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of options available for grant		77,540		77,540

v3.23.3

SUMMARY OF SEGMENTED DATA (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting Information [Line Items]
Revenue from external customers	$ 2,087	$ 1,783	$ 5,809	$ 5,155
Segment gross profit	1,550	1,215	4,356	3,719
Depreciation and amortization	41	36	115	85
Segment income (loss) before income taxes	366	20	856	237	[1]
PG [Member]
Segment Reporting Information [Line Items]
Revenue from external customers	1,798	1,510	4,994	4,335
Segment gross profit	1,381	1,092	3,876	3,256
Depreciation and amortization	36	31	99	72
Segment income (loss) before income taxes	361	78	891	340	[1]
CP [Member]
Segment Reporting Information [Line Items]
Revenue from external customers	289	273	815	820
Segment gross profit	169	123	480	463
Depreciation and amortization	5	5	16	13
Segment income (loss) before income taxes	$ 5	$ (58)	$ (35)	$ (103)	[1]
[1] Software impairment of $51,000

v3.23.3

SUMMARY OF SEGMENTED DATA (Details) (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Line Items]
Asset Impairment Charges	$ 9	$ 31
Software [Member]
Property, Plant and Equipment [Line Items]
Asset Impairment Charges		$ 51,000

v3.23.3

SCHEDULE OF RECONCILIATION OF SEGMENT DATA TO CONSOLIDATED STATEMENT OF OPERATIONS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting [Abstract]
Total net income before income taxes for reportable segments	$ 366	$ 20	$ 856	$ 237
Unallocated software impairment				(51)
Unallocated cost of corporate headquarters	(339)	(230)	(814)	(741)
Consolidated net income (loss) before income taxes	$ 27	$ (210)	$ 42	$ (555)

v3.23.3

SCHEDULE OF DISAGGREGATES OF REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total Revenue	$ 2,087	$ 1,783	$ 5,809	$ 5,155
PG [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	1,798	1,510	4,994	4,335
CP [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	289	273	815	820
Hardware [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	1,004	825	2,637	2,241
Hardware [Member] | PG [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	780	608	2,017	1,610
Hardware [Member] | CP [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	224	217	620	631
Monitoring [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	1,083	958	3,172	2,914
Monitoring [Member] | PG [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	1,018	902	2,977	2,725
Monitoring [Member] | CP [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	$ 65	$ 56	$ 195	$ 189

v3.23.3

SCHEDULE OF DEFERRED REVENUE ACTIVITY (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Disaggregation of Revenue [Line Items]
Balance at December 31, 2022	$ 6,171
Additions during the period	5,033
Recognized as revenue	(4,993)
Balance at September 30, 2023	6,211
September 30, 2024	4,270
September 30, 2025	1,612
September 30, 2026 and thereafter	329
Total	6,211
Hardware [Member]
Disaggregation of Revenue [Line Items]
Balance at December 31, 2022	3,751
Additions during the period	1,597
Recognized as revenue	(1,821)
Balance at September 30, 2023	3,527
September 30, 2024	2,023
September 30, 2025	1,179
September 30, 2026 and thereafter	325
Total	3,527
Monitoring [Member]
Disaggregation of Revenue [Line Items]
Balance at December 31, 2022	2,420
Additions during the period	3,436
Recognized as revenue	(3,172)
Balance at September 30, 2023	2,684
September 30, 2024	2,247
September 30, 2025	433
September 30, 2026 and thereafter	4
Total	$ 2,684

v3.23.3

SCHEDULE OF RECONCILIATION OF HARDWARE REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 2,087	$ 1,783	$ 5,809	$ 5,155
Hardware [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,004	825	2,637	2,241
Hardware [Member] | Amortization [Member]
Disaggregation of Revenue [Line Items]
Revenue	629	631	1,821	1,658
Hardware [Member] | Sales of Custom Designed Units [Member]
Disaggregation of Revenue [Line Items]
Revenue	43		135
Hardware [Member] | Hardware Sales [Member]
Disaggregation of Revenue [Line Items]
Revenue	150		150
Hardware [Member] | Other Accessories [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 182	$ 194	$ 531	$ 583

v3.23.3

SCHEDULE OF DEFERRED CHARGES ACTIVITY (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Revenue from Contract with Customer [Abstract]
Balance at December 31, 2022	$ 1,694
Additions, net of adjustments, during the period	655
Recognized as COGS	(817)
Balance at September 30, 2023	1,532
September 30, 2024	890
September 30, 2025	507
September 30, 2026 and thereafter	135
Total	$ 1,532

v3.23.3

SCHEDULE OF RECONCILIATION OF COGS EXPENSE (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 2,087	$ 1,783	$ 5,809	$ 5,155
COGS [Member]
Disaggregation of Revenue [Line Items]
Revenue	537	568	1,453	1,436
COGS [Member] | Amortization [Member]
Disaggregation of Revenue [Line Items]
Revenue	277	309	817	793
COGS [Member] | COGS of Custom Designed Units [Member]
Disaggregation of Revenue [Line Items]
Revenue	11		34
COGS [Member] | COGS of Hardware Sales [Member]
Disaggregation of Revenue [Line Items]
Revenue	66		66
COGS [Member] | COGS Data Costs [Member]
Disaggregation of Revenue [Line Items]
Revenue	76	93	224	250
COGS [Member] | Other COGS Accessories [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 107	$ 166	$ 312	$ 393

v3.23.3

SCHEDULE OF SALES COMMISSIONS CONTRACT ASSETS (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Disaggregation of Revenue [Line Items]
Balance at December 31, 2022	$ 399
Additions during the period	191
Amortization of sales commissions	(176)
Balance at September 30, 2023	414
Hardware [Member]
Disaggregation of Revenue [Line Items]
Balance at December 31, 2022	319
Additions during the period	148
Amortization of sales commissions	(149)
Balance at September 30, 2023	318
Monitoring [Member]
Disaggregation of Revenue [Line Items]
Balance at December 31, 2022	80
Additions during the period	43
Amortization of sales commissions	(27)
Balance at September 30, 2023	$ 96

v3.23.3

SCHEDULE OF SALES COMMISSIONS EXPENSE (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Revenue from Contract with Customer [Abstract]
September 30, 2024	$ 218
September 30, 2025	138
September 30, 2026 and thereafter	58
Total	$ 414

v3.23.3

REVENUE (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Other current assets	$ 343,000	$ 288,000
Capitalized Sales Commissions [Member]
Disaggregation of Revenue [Line Items]
Other current assets	218,000	196,000
Other assets	196,000	$ 203,000
Hardware [Member]
Disaggregation of Revenue [Line Items]
Deferred revenue recognized	1,469,000
Monitoring [Member]
Disaggregation of Revenue [Line Items]
Deferred revenue recognized	$ 1,890,000

v3.23.3

RELATED PARTY BALANCES AND TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Officer [Member]
Related Party Transaction [Line Items]
Officer and Director fees	$ 131,000	$ 130,000	$ 391,000	$ 391,000
Director [Member]
Related Party Transaction [Line Items]
Officer and Director fees	18,000	$ 15,000	52,000	44,000
Related Party [Member]
Related Party Transaction [Line Items]
Accrued interest and expenses	$ 2,928,000		2,928,000		$ 3,677,000
Related party expenses paid			21,000	142,000
OmniMetrix, LLC [Member]
Related Party Transaction [Line Items]
Decrease in related parties			749,000	447,000
Debt repayment			961,000	780,000
Interest			134,000	134,000
Dividends			$ 57,000	$ 57,000

---